Wednesday, March 10, 2010

CHINESE NPC: CAUTIOUS LINE ON ECONOMY

B.RAMAN


Despite the signs of recovery of the Chinese economy since the last quarter of 2009, the Government needs to follow a cautious line till it is satisfied that the recovery is being sustained and will continue to be sustainable. That is the message repeatedly being stressed during the current session of the National People's Congress (NPC), the Parliament, being held at Beijing since March 5,2010.


2. Even as the session was on, there were encouraging reports from the foreign trade front on which the Chinese economy has depended for its progress till now. The Customs Bureau of the Chinese Government reported on March 10,2010, that exports went up by 46 per cent in February from a year before after a 21 per cent increase in January. Imports increased by 45 per cent in February as compared to February of last year. Combined data for January and February showed that exports surged by 31.4 per cent during the period from a year earlier. Shipments to other countries amounted to 94.5 billion dollars, continuing a 3-month streak of export gains. China's global trade surplus was $7.6 billion in February and the combined January-February surplus was $21.8 billion.


3.These seemingly spectacular increases were as compared to January-February of 2009 when the foreign trade had come down steeply due to a steep fall in orders from the US and the EU countries. What these figures indicate is that the downturn in exports has been arrested and reversed, but they do not indicate a return to the pre-2008 position. Chinese economists have been cautioning that it might take at least about three years to reach the pre-2008 figures and that till then one cannot claim that the economy has recovered from the crisis triggered off by the fall in overseas orders. A reversion back to the pre-2008 position would depend not only on the success of the Chinese policies to deal with the crisis, but also on the success of the policies of the US and other countries.


4. Even before the latest Customs figures were released, Chinese leaders and officials , who intervened in the NPC discussions and who briefed the media in the margins of the session, were cautioning against any over-optimistic assessments of the recovery. They stressed the need to wait till the third quarter of this year before assessing the sustainability of the recovery.


5.They said that it would be premature to consider any withdrawal of the economic stimulus policy initiated after the onset of the crisis in 2008 in order to step up investments in infrastructure projects and increase the domestic demand to reduce the dependence on exports. The Central bank Governor Zhou Xiaochuan said on March 6, 2010, that the policy makers must be "very cautious" in timing an exit as a world recovery wasn't yet solid. Commerce Minister Chen Deming said the same day that it was too early to say that exports had recovered from the global financial crisis.



6.Zhu Guangyao, the Assistant Minister for Finance, said that it would be too early for the Government to withdraw its economic stimulus policy and called upon other countries to coordinate their exit strategy to strengthen the fledgling recovery. He added that the global economic situation was too unpredictable at present to make such a move. The Government had announced a 586-billion U.S. dollars stimulus package in late 2008, which was designed to be implemented in 2009 and 2010. Zhu said: "The Central Government has taken into consideration the effect of the global financial crisis that will continue to be felt this year.The stimulus policy will continue, and China will stick to a proactive fiscal policy and moderately easy monetary stance."


7.Li Yining, senior economist and a member of the Chinese People's Political Consultative Conference (CPPCC) National Committee, warned that it would do the Chinese economy more harm than good if the country exited the stimulus package now. He said: “Recovery in developed countries is not entrenched; and domestically, although new orders are increasing, more time is needed to monitor their sustainability. We need to wait until at least till the third quarter of this year to see whether the time is ripe for an exit."


8. Prime Minister Wen Jiabo told the NPC in his address on March 5,2010: " We must not interpret the economic turnaround as a fundamental improvement in the economic situation. This is a crucial year for continuing to deal with the global financial crisis, maintaining steady and rapid economic development and accelerating the transformation of the pattern of economic development. This year the main targets we have set for economic and social development are increasing GDP by approximately eight per cent... (and) holding the rise in consumer prices to around three per cent."


9. A careful reading of the cautionary notes coming from different leaders and officials would indicate that they are ruling out any termination of the present stimulus package before it is fully implemented by the end of this year. The recovery since the last quarter of 2009 would not come in the way of its implementation. At the same time, they are not talking of any fresh stimulus package when the present one is completed by the end of this year. One could also discern a note of concern that the recovery of exports might increase pressure from the US for a revaluation of the yuan. Hence, the widely and loudly expressed caution about the sustainability of the recovery.


10. In the media briefings in the margins of the NPC session, Chinese policy-makers have expressed their continued confidence in the US dollar and emphasized that decisions regarding continued investments of their foreign exchange reserves in US Treasury Bonds would be taken purely on economic and not on political grounds. The message coming out is: The decisions regarding investments in US bonds would be taken by the investing banks and not by the Foreign Office. There has been a clear attempt to dismiss speculation that the decisions of President Barack Obama to sell more arms to Taiwan and to receive His Holiness the Dalai Lama could affect future Chinese investments in the US bonds.


11. Yi Gang, head of the State Administration of Foreign Exchange (SAFE), the chief currency regulator, reiterated on March 9 China’s continued commitment to invest in US Treasuries. He asserted that a recent unloading of some holdings was simply part of regular market operations. He added that the country is diversifying its foreign investments to spread out risks, and it has no plan to boost its gold holdings. He made it clear that China's investment in US Treasuries is market-driven and should not be politicized. He said: "The US Treasury market is the world's largest government bond market. Our foreign exchange reserves are large, so you can imagine that the US Treasury market is very important to us."



12. In 2008 and 2009, the fears among the policy-makers were over the possibility of political and social unrest due to the closure of a large number of factories depending on exports and the increase in unemployment. There is now a confidence that these dangers have been averted through the stimulus package and through measures for the restructuring of the economy initiated in order to depend in future more on domestic demand than on exports.


13. The present fears as reflected during the NPC session are over the widening economic gap between urban and rural residents, resentment in the interior areas over the restrictions on their migrating to the urban areas in order to partake of the urban prosperity, the increasingly unaffordable prices of houses which are creating pockets of resentment in the urban areas and dangers of uncontrolled lending by the banks. Till now, the Chinese banks give the impression of functioning well and no major bank has run into serious difficulties due to bad debts. Does this indicate the true state of the health of the banking sector?


14. According to the “Global Times”, between 2000 and 2009, China's GDP tripled from 9.9 trillion yuan to 33.53 trillion yuan, while per capita GDP grew from 7,858 yuan to about 20,500 yuan, putting the country on track toward becoming the second-largest economy in the world. However, the increase in average income contrasts with a widening gap between urban and rural residents. The per capita disposable income of urban residents was 17,175 yuan last year, compared with 5,153 yuan for rural residents, according to the latest figures from the National Bureau of Statistics, with the income ratio between urban and rural residents at 3.33:1, in comparison to 2.56:1 in 1978. While people in large cities such as Beijing and Shanghai have been earning more than 100,000 yuan a year and buying cars for family use, some people in remote western areas, such as the Ningxia Hui Autonomous Region, can make only about 2,000 yuan, not even enough to buy a phone with.More than 40 million people are living under the poverty line of 2,000 yuan per year.


15. The Government has this year pledged a package of measures to improve income distribution, including increasing farmers' and rural workers’ income and providing more support to low-income residents. Proposals for relaxing curbs on migration from the rural to the urban areas are also under consideration. ( 11-3-2010)


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

Tuesday, March 9, 2010

POLITICAL REFORMS IN CHINESE COLOURS

B.RAMAN

After successfully carrying forward and implementing the policy of economic reforms initiated by Deng Xiaoping in 1978, the time has come to think in terms of initiating a policy of political reforms to give a greater voice to the people and the media in articulating their views on the policies and performance of the Government. At a time when the Internet has had a spectacular expansion in China and thousands of blogs have provided the netizens with an opportunity to express their frank views on the problems confronting the country and the performance of the Communist Party and the Government, it looks absurd to project rubber stamp bodies such as the National People’s Congress (NPC), the Parliament, under session in Beijing since March 5,2010, as the genuine voice of the people. The time has come for a genuine political restructuring of the country without damaging its political stability.


2. These refreshing views have found expression from some quarters during the current session of the NPC. Among those expressing himself in favour of political restructuring was Prime Minister Wen Jiabo himself who told the NPC on March 5,2010, while delivering the annual report on the work of his Government: “ China's modernization drive and economic reforms could risk a failure without political restructuring.The Government would create conditions for the people to criticize and supervise the Government, and let news media fully play their oversight role so as to put the authorities under sunlight.”


3. Commenting on his remarks which have not received outside China the attention they deserved, the Government-owned Xinhua news agency said: “ Observers took the remarks as a significant signal for the nation to advance political restructuring.”


4. It quoted Professor Wang Wei of the Politics School of the Chinese Academy of Governance, as commenting as follows on Prime Minister Wen’s remarks: “ Wen's statement reflected the Central Government's confidence although the nation faced a complex internal and external environment. If the Government gets carried away by achievements and thinks the system unparalleled, the nation will be thrown into danger, as the nation can hardly sustain its economic prosperity if political restructuring trails."


5. It also quoted Prof. Yu Pei, head of the World History Studies of the Chinese Academy of Social Sciences, as saying that advancing political restructuring would help China better address its thorny domestic concerns and bring closer the ties between the Government and the people. He added : “’If China wants to seek a bigger role in the global arena, it must grow stronger and have its economic and social problems well addressed first. In his work report to the National People's Congress Wen admitted the Government's work still fell considerably short of public expectations. Wen also admitted that the transformation of Government functions is incomplete and there is too much Government interference in the micro-economy, and public administration and services are relatively weak. Efforts should be made to focus on transforming Government functions, deepening reform of the administrative system and working hard to make the Government devoted to service.”


6. Among the political reforms mentioned by the Prime Minister were:




The Government will earnestly deal with serious infringements on public interests related to enterprises' conversion to a stockholding system, land expropriation, housing demolition and resident relocation, environmental protection, labor disputes, and legal and litigation issues.

It will also improve handling of public complaints.

It will develop socialist democracy and effectively safeguard the democratic rights of people as "masters of the country."

China will further expand primary-level democracy and strengthen primary-level self-governing bodies so that people can better participate in the management of local affairs.

The legislature is to amend the Electoral Law, adopted in 1953, during the session. The amendment aims at ensuring equal electoral rights between urban and rural residents.

7. The emphasis in Wen’s speech was still on China continuing as a socialist democracy. That means, he has ruled out Western-style liberal democracy. There will be greater freedom to criticize Government’s policies and performance, but not political dissidence. The criticisms should seek to improve the party and the Government and not weaken and undermine their primacy. That is the message which he sent across to the people through his statement in the NPC.


8. But in an editorial carried on March 4,2010, the party-owned “Global Times”, which seeks to project itself as more independent and objective than other party and Government-owned media, said: “On the long, winding path toward democracy, muzzled "people's representatives" would undoubtedly take the nation nowhere. China is a conventionally centralized society, where consensus seems so easy to reach, and dissenting opinions are so rare. That explains why the delegates' courage and savvy to speak the truth can play a crucial role in properly addressing the concerns of the vulnerable social groups and laying a solid foundation for a civil society. Caught in the "deep water zone" of reform, China finds itself confronted with many pressing economic, political and social problems. Past achievement can at best serve as a morale booster, though at times they may inspire solutions. While they provide a record for going forward, it is problems that demand attention. Only when the people's representatives can freely express their concerns and frankly moot suggestions can the problems be solved efficiently while social justice is delivered. Given the domestic and international scenarios of the "most complicated year," there is a particularly strong case for the authentic voices of representatives to be heard. Riding the wave of rising expectations, both at home and abroad, China can only go forward when the people's representatives are truthful and outspoken at the people's sessions.”


9. Political reforms, yes, but in Chinese colours. That is the message coming out of the NPC session. (10-3-10)


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

TIBET: TWO YEARS AFTER THE UPRISING OF 2008

B.RAMAN


The Chinese are less tense and more relaxed as Tibet and Tibetans observe the second anniversary of the uprising of March 10,2008, which started in Lhasa and spread across the Tibetan areas. They have made many preventive arrests in Tibet to prevent anything untoward happening, but the high tension, which one witnessed last year, is not there.


2.The Chinese authorities continue to be more nervous about the situation in Muslim-majority Xinjiang than in Buddhist-majority Tibet. Despite the reported death last month of Abdul Haq al-Turkistani, the Amir of the Islamic Movement of East Turkestan (IMET), in a missile strike by a Drone (pilotless plane) of the US in North Waziristan of Pakistan, the Chinese officials in charge of internal security in Xinjiang are worried over the situation in the Autonomous Region and are taking no chances. If the death of Abdul Haq is confirmed, it is not clear who would succeed him. So little is known about the organisational structure of the IMET that it is difficult to assess what would happen to the IMET after him.


3. There has been a greater sophistication in Beijing in the handling of the Tibetan issue. One no longer sees the kind of demonisation of His Holiness the Dalai Lama which one used to see before March,2009. The Chinese reacted with anger to the meeting of President Barack Obama with His Holiness in the White House last month, but refrained from talk of any retaliatory action against the US.


4. The Chinese authorities held a Tibet strategy session at Beijing from January 18 to 20, 2010. Since the People’s Liberation Army occupied Tibet in 1949-50, Chinese leaders are reported to have held five such strategy sessions under the name the Tibet Work Forum. The latest session called the Fifth Tibet Work Forum was reported to have been attended by about 300 Party, Government and military leaders playing a role in policy-making on Tibet.


5.There were three significant outcomes of the Forum:

While continuing to reject the Dalai Lama's idea of an integration of all the Tibetan areas of Tibet,Sichuan, Yunnan, Gansu and Qinghai provinces, they are now making a distinction between the problems of governance in the Tibet Autonomous Region and the problems of development of the Tibetan minority living in these provinces. There is an attempt to approach the development, religious and cultural problems of the Tibetans in a comprehensive manner, wherever they might be living.

While continuing to claim that Tibet has developed considerably under Chinese rule, there is now an admission that there is a wide gap between the urban and rural areas. The development in Tibet has till now been focused largely on infrastructure projects. The beneficiaries of infrastructure-centric development were the people in the urban areas. The rural people benefited mush less. There is now an admission of the need to develop further the rural areas in order to improve the quality of life of the people.

The Work Forum led to a decision to resume the dialogue with the representatives of His Holiness after a gap of 14 months. The talks, which were held in the last week of January, 2010, could not break the deadlock. Both sides stuck to their respective position. While the representatives of His Holiness maintained that the purpose of the dialogue was to discuss the future of Tibet and the Tibetans in the context of His Holiness' demand for greater autonomy and for the integration of all Tibetan-inhabited areas in a single province, the Chinese made it clear that the purpose was to discuss the future of His Holiness and not of Tibet and the Tibetans. However, despite the deadlock, both sides have kept open the possibility of more meetings.

6. The opportunity provided by the current session of the National People's Congress (NPC), the Chinese Parliament, at Beijing has been utilised by the Chinese leaders to make it clear in a media briefing held on March 7,2010, in the margins of the session that the Chinese Government will have the final say regarding succession to His Holiness.Padma Choling, an ethnic Tibetan who was appointed Governor of the Tibet autonomous regional government in January, 2010, told the media briefing as follows:"The reincarnation of Living Buddhas in Tibetan Buddhism should follow strict historical conventions and religious rituals. There have been 14 Dalai Lamas ... It is unreasonable for him to do whatever he wants (about reincarnation). There's no way for him to do so.The 14th Dalai Lama himself was approved by the Nationalist government, the then central regime of China."


7.Qiangba Puncog, Chairman of the standing committee of the Tibet autonomous region's People's Congress, said at the briefing: "The reincarnation must meet the traditional requirements in four aspects: religious rituals, historical conventions passed on since the Qing Dynasty (1644-1912), lot drawing from the Golden Urn in front of the Buddha Sakyamuni, as well as approval from the Central Government.
Any claimed reincarnation that fails to meet all these requirements will be illegitimate and invalid."


8.Padma Choling ridiculed the Dalai Lama's indecision on his succession and said: "The Dalai Lama has previously made a series of assertions, saying that he might choose his reincarnation while alive, that he could stop his reincarnation, that his reincarnation could be designated, that his reincarnation could be a female, or that his reincarnation would be found inside or even outside China. People don't know which assertion is what he really wants. There is currently no need to talk too much about issues related to the reincarnation of the Dalai Lama, as he is still alive."


9. The Chinese have utilised the current NPC session to give a greater political exposure to the Panchen Lama nominated by the Chinese Government in 1995 after rejecting the Panchen Lama designated according to Tibetan Buddhist traditions by the Dalai Lama. The Government-designated Panchen Lama is one of the 13 new members nominated to the National Committee of the Chinese People's Political Consultative Conference (CPPCC), a top advisory body with no legislative powers.


10. During his interactions with the Tibetan delegates to the NPC session, President Hu Jintao said that political stability and economic development would be the keynotes of the Government's policy on Tibet. ( 9-3-10)


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

Monday, March 8, 2010

TERRORISTS TARGET LAHORE AGAIN

INTERNATIONAL TERRORISM MONITOR--PAPER NO. 627

B.RAMAN


At least 11 persons are reported to have been killed in a suicide bomb attack on a rented building of the Federal Investigation Agency (FIA) of Pakistan in the residential Model Town area of Lahore on the morning of March 8,2010. The large quantity of explosive used brought down the entire building.


2. This is the first terrorist attack in Lahore this year. Last year, there were five as follows:

15 October: Terrorists attacked offices of law enforcement agencies.
12 June: A prominent anti-Taliban cleric killed by a suicide bomber at his religious school
27 May: A car bomb attack on police buildings killed 23 persons.
30 March: Gunmen attacked a police academy, killing eight people
3 March: Gunmen killed six police guards in an ambush of the Sri Lankan cricket team


3. The latest attack has taken place after an interval of about five months. There are two possibilities--- either it was carried out by the Terhrik-e-Taliban Pakistan (TTP) to demonstrate that it still had the capability to attack targets in the non-tribal areas despite the losses suffered by it since the beginning of this year----including the reported but unconfirmed death of its Amir Hakimullah Mehsud after he was injured in a missile strike by a Drone (unmanned) plane of the US in January--- or it was carried out by the anti-Shia Lashkar-e-Jhangvi (LEJ) in retaliation for the reported death of its leader Qari Mohammad Zafar in a US Drone strike in North Waziristan on February 24,2010. The greater possibility is that the latest attack was carried out by a bomber of the LEJ, which has been operating jointly with the TTP and Al Qaeda and which has the capability for spectacular strikes in Lahore.


4. Police and FIA-connected targets and a target of the Inter-Services Intelligence (ISI) have been attacked in Lahore since the beginning of last year because of the terrorists' calculation that instability in Lahore could make the Army and the FIA go slow in their operations against the TTP and the Punjabi Taliban. The targeting of the FIA and the ISI in recent months is due to their being perceived by the TTP and the LEJ as working in close co-operation with the US intelligence agencies in the Federally-Administered Tribal Areas (FATA). The FIA has also been in receipt of increasing assistance from the US for strengthening its counter-terrorism capability.


5. The Lahore attack came a day after sections of the Pakistani media had claimed that the Pakistani intelligence agencies had managed to arrest Adam Gadahn, the American convert to Islam, who heads the As-Sahab, the propaganda wing of Al Qaeda from a hide-out in a Pashtun inhabited area of Karachi where a large number of Mehsuds from South Waziristan live. Western sources have expressed skepticism about the correctness of the Pakistani claim.


6. If the Pakistani claim proves to be correct, this is a significant breakthrough in the fight against Al Qaeda. If the Pakistani authorities allow the US agencies to interrogate him, they could have fairly correct information regarding the whereabouts of Osama bin Laden and Ayman al-Zawahiri. As mentioned by me in my note of February 22,2010 titled "Are Bin Laden & Zawahiri in Karachi?" available at http://www.southasiaanalysis.org/papers37/paper3681.html, "sources in Mr.Altaf Hussain's organisation are now alleging that not only leaders of the Afghan Taliban, but also many absconding elements of Al Qaeda, including Osama bin Laden, and his No.2 Ayman al-Zawahiri, have shifted to Karachi from North Waziristan to escape the intensified Drone (unmanned planes) attacks by the USA's Central Intelligence Agency (CIA) and that they have been given shelter by their Pashtun sympathisers in Karachi. They further allege that the Pakistani authorities and some of the political leaders are aware of this."


7. There is no reason to believe that the Lahore attack might have been connected with Gadahn's claimed capture, but retaliatory attacks in Karachi, Rawalpindi and Lahore are likely if it turns out that he has in fact been captured. Whether Gadahn has been captured in Karachi or not, there is a need for an intensified hunt to smoke out Al Qaeda leaders and members from Karachi. After Tora Bora in 2001-02, many of them including Khalid Sheikh Mohammad and bin Laden himself had taken shelter in Karachi, but they ran away from Karachi after Ramzi Binalshib was captured.


8. If the capture of Gadahn in Karachi proves to be correct, there is bound to be panic in the terrorist hide-outs in Karachi and the others taking shelter there might flee back to the tribal areas or might try to escape to Yemen. Strong surveillance to prevent this is necessary. (8-3-10)


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

Sunday, March 7, 2010

CHINA PUTS GOOGLE & OBAMA IN THEIR PLACE

B.RAMAN


The Chinese Government has quietly put Google and President Barack Obama in their place.


2. In January this year, Google had expressed its intention to review its presence in China if the Chinese Government continued to insist that its search engines should black out items and web sites of political dissidents. It also protested against the alleged snooping of the e-mail addresses of Tibetan and other separatist elements using the Google mail service by the Chinese authorities.


3. The Chinese authorities, while regretting the decision of Google, had pointed out that the restrictions imposed in the interest of national security by the Chinese Government were in force even when Google entered the Chinese market. They looked upon the move of Google for a so-called review as politically motivated without any legal justification and made it clear that Google was welcome to continue to function in China provided it observed the Chinese regulations relating to the Internet. They rejected with indignation Google’s allegations of cyber snooping by Beijing.


4. Members of the Obama Administration, including Mrs.Hilary Clinton, the Secretary of State, came out in support of Google, but this did not have any effect on Beijing. Since then there has been a stalemate with neither Google nor the Chinese Government making any further move in the matter.


5. In the latest development, the Chinese authorities have strongly denied that any talks on the issues raised by Google were going on with its officials. They have bluntly made it clear that while they would be happy if Google decided to continue in China and observe its Internet regulations, they would be equally happy to facilitate its exit from the Chinese market if it wanted to quit.


6.The “China Daily” reported as follows on March 6,2010: “China's Ministry of Industry and Information Technology refuted that China has been involved in any negotiations with Google since the US search engine threatened on January 21 to pull back from the country."We have yet to have any direct contacts or negotiations with them on this topic," said Miao Wei, vice-minister of the MIIT, at the sidelines of the annual session of the National People's Congress. Google had never filed reports over alleged Internet regulations and cyber attacks to the ministry or requested for negotiations, said Miao. It had also never informed the ministry that it was planning to withdraw from China. He said China respects Google's right to decide whether to continue its business in the country. "If Google decides to continue its business in China and abides by China's laws, it's welcome to stay," Miao said. "If the company chooses to withdraw from the Chinese market, it must go through certain procedures according to the law and regulations and deal with customers' problems that may arise." Miao also said he didn't think the Google incident should affect relations between China and the US."It's not a huge problem that should impact the relationship of two countries," he said. He said China doesn't want to see an Internet technical incident upgraded to a political dispute.He also said China welcomes Google to provide further information about the hacker attacks it claimed. "We will definitely investigate on the issue, because we are the victims of hackers too."Google had studied China's laws and regulations before it entered the Chinese market in 2007 and had pledged in written form to abide by the laws and regulations.”


7.The Chinese have similarly put Obama in his place over his decisions to sell a fresh package of arms to Taiwan and to receive His Holiness the Dalai Lama in the White House last month. The Chinese had initially reacted strongly against these decisions and announced the postponement of exchanges of military level visits between the two countries over the Taiwan issue. They had also threatened to impose sanctions against US companies selling military equipment to Taiwan under the proposed package. They have since played down these threats and permitted the US naval ship USS Nimitz to visit Hong Kong.


8. On Tibet, they had strongly criticised the Mr.Obama's meeting with His Holiness, but refrained from openly threatening any retaliatory action. However, Chinese officials were spreading word that President Hu Jintao may not attend the Nuclear Security Summit to be held in the US next month to which Obama attaches considerable importance to express Beijing's unhappiness over the sale of arms to Taiwan and over the meeting with His Holiness.


9.Chinese sources see a link between the speculation about a likely boycott of the nuclear security summit by Mr.Hu Jintao and Mr.Obama's decision to send Mr.James Steinberg, Deputy Secretary of State, and Mr.Jeffrey Bader , a White House aide, to Beijing last week reportedly to remove misunderstandings arising from the decisions to sell more arms to Taiwan and to receive His Holiness. The visiting US officials were reported to have reassured their Chinese interlocutors that Mr.Obama's decisions did not mean any change in the US position on the one-China policy and that Tibet was an integral part of China



10. Commenting on the visit of the two officials to Beijing, Mr.Philip Crowley, a State Department spokesman, said on March 4,2010, that the US and China "agreed on the high importance each attaches to the relationships and their commitment to building a positive, cooperative and comprehensive relationship." He added that the US responded to China's concerns on Taiwan "by reiterating that it has followed a consistent approach, pursued by both administrations of both political parties, on a 'One China' policy."


11. Briefing the media in Beijing, Qin Gang, a spokesman of the Chinese Foreign Ministry, said that the US had agreed to "take China's position seriously, honor China's core interests and major concerns" and to act to improve relations. Mr. Yang Jiechi, the Chinese Foreign Minister, also commented on the relations with the US while briefing the media on March 7,2010, on China’s foreign policy in the margins of the annual session of the National People’s Congress, the Chinese Parliament, being held since March 5,2010. He urged the US to take seriously China's position and respect China's core interests and major concerns with credible steps.


12. He added: "The United States should properly handle relevant sensitive issues and work with the Chinese side to return the China-US relationship to the track of stable development. The China-US relationship had a good start after President Obama took office last year. However, the US arms sales to Taiwan and the US leader’s meeting with the Dalai Lama caused a serious disturbance to the China-US ties and posed difficulty to the cooperation between the two countries. Such a situation is not in the interest of either side, and the responsibility for the difficulty in Sino-US relations does not lie with China."


13. Referring to the talks with the two visiting US officials, he said: “"The Chinese side stated in full its principled position on China-US relations and on major issues, including Taiwan and Tibet related issues. We pointed out that the relevant moves taken by the US side had seriously violated the principles set out in the three China-US joint communiques and the China-US joint statement. The moves undermined China's core interests and the overall interests of China-US relations, and China is firmly opposed to these moves."


14. While the US has thus taken the initiative to cool the bilateral tensions by reassuring Beijing that there has been no change in its one-China policy and on Tibet being an integral part of China, it is not yet clear whether the Chinese are sufficiently satisfied by the US assurances and whether President Hu will attend the nuclear security summit. (8-3-10)



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

Saturday, March 6, 2010

CHINA IN MALDIVES

B.RAMAN


The Government-controlled Xinhua news agency of China has disseminated the following report on March 6,2010:


"China UnionPay (CUP) began cash withdrawal services for card holders in 95 percent of automatic teller machines in the Maldives, after launching a partnership with the island nation's biggest bank Friday (March 5).Following cooperation between the CUP and the Bank of Maldives, CUP card payment services will expand to 90 percent of point-of-sale (POS) terminals in Maldives. The move aims to better serve card users as China has become the Maldives' fastest growing tourist source country since 2008, with visitors hitting 40,000 a year, said Cai Jianbo, CUP first executive Vice-President. The international network of the CUP reaches 84 countries and regions. CUP launched a card payment service in Brunei on Tuesday." ((7-3-2010)

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

ANNEXURE

A note on Sino-Maldives Relations disseminated by the Chinese Ministry of Foreign Affairs on August 19,2009 )


Sino-Maldives relations



Political Relations

Maldivesis called "Liushan Guo" or "Liuyang Guo" in Chinese history. In Yongle 10th year (1412) and Xuande 5th year (1430) of the Ming Dynasty, leading a fleet of merchant ships, Zheng He reached Maldives twice. Since Yongle 14th year, King of Maldives Yusof sent his envoys three times to China. In Foreign Splendors written by Zheng He and his entourage Ma Huan and Maritime Marvels by Fei Xin were true and detailed records of Maldives' geographical position, climate, products and customs. In Male Museum are China's porcelain and coins unearthed there on display, a witness to China's friendly contacts and trade relations with Maldives in history. Due to the imperialist invasion afterward, Sino-Maldives relations were suspended for several centuries.



In the early 1960s, Chinese and Maldives ambassadors to Sri Lanka started visiting each other. China supported Maldives in its struggle for national independence by ridding itself of the British colonial rule. On October 14, 1972, China and Maldives established diplomatic relations, and Chinese ambassador to Sri Lanka was concurrently accredited to Maldives. In 1980, Maldives Foreign Minister Jamil officially paid a friendly visit to China. In 1984, Maldives President Gayoom paid a state visit to China. In 1993, Foreign Minister Jameel visited China again. In 2000, Maldives State Minister of Defence and National Security Sattar visited China and in 2001, Foreign Minister Jameel, Speaker Hameed and Brigadier Zahir, General Chief of Staff for National Security Force visited China one after another.



On the other hand, Chinese Vice-Premier cum Foreign Minister Huang Hua, Vice-Premier cum Foreign Minister Qian Qichen, Vice-Chairperson of the Standing Committee of the NPC Chen Muhua, and Chairman of the CCPCC Li Ruihuan, General Chief of Staff of the PLA Fu Quanyou and Premier Zhu Rongji visited Maldives respectively in 1981, 1994, 1997, 1999 and 2001. On the occasion of 30th anniversary of the establishment of the Sino-Maldives diplomatic relations in 2002, President Jiang Zemin and Foreign Minister Tang Jiaxuan exchanged congratulatory messages respectively with President Gayoom and Foreign Minister Jameel. On May 26, 2009, Maldives opens its Chinese embassy in Beijing. Mr. Ahmed Latheef becomes Maldives' first Ambassador to China.



Economic and Trade Relations and Economic-Technological Cooperation



In 1981,China and Maldives started their economic and technological cooperation. In 1982, they restored direct trade. In 2002, Sino-Maldives trade volume totaled US$2.977 million, of which China's exports accounted for US$2.975 million and its imports US$2,000.



Since 1972, China has provided Maldives with aid totaling RMB74.7875 million. Starting form 1985, Chinese companies began entering project-contracting market in Maldives. By the end of 2001, the accumulated volume for their contracted projects in Maldives had reached US$46.37 million, with their turnover reaching US$40 million.



Sino-Maldives economic cooperation and trade volume are very insignificant. Hong Kong and Singapore serve as transit ports fro most of China's exports to Maldives. China's major products to Maldives are rice and consumer goods.



China and Maldives have seen infrequent contacts and cooperation in other fields. Between 20 and 30 September 2002, at the invitation of the Central Military Commission, Maldives State Minister of Defence and National Security paid a friendly visit to China, which was the first official contact between the Chinese and Maldives armies.



On May 18, 1998, the governments of Maldivesand SAR Hong Kong of China signed the transit agreement for civil flights.

Thursday, March 4, 2010

FRESH FEARS OF MARITIME TERRORISM

INTERNATIONAL TERRORISM MONITOR--PAPER NO.626

B.RAMAN


The years following the Al Qaeda attack on the US naval ship USS Cole in Aden in October,2000, saw an increase in fears of sea-borne terrorism either on coastal targets or on sea-moving targets such as oil/gas tankers, container ships etc. There were also fears of a possible Al Qaeda-inspired attack to block maritime choke-points such as the Malacca Strait.


2. These fears were caused by the flow of human intelligence as well as by the interrogation of arrested suspects. These fears reached the zenith in the months following the US invasion and occupation of Iraq in 2003. Consequently, there was increased international and regional co-operation in the form of exchange of intelligence and assessments, joint or co-ordinated naval patrolling, joint naval exercises, intensified action against piracy in the Malacca Strait etc.


3. Post-2005, these fears got diluted partly due to the absence of any terrorist attack from the sea, partly due to the preoccupation of Al Qaeda and its allies with land-based operations in Iraq and Afghanistan and partly due to the effective action taken against piracy in the Malacca Strait region.


4.In recent months, there has been a revival of the fears about a possible maritime terrorist strike due to the following reasons: Firstly, an increase in incidents of piracy by Somali/Yemeni pirates and the inability of the international community to deal effectively with the problem till now; secondly, an increase in the activities of Al Qaeda in Yemen and Somalia, both of which have a large number of sea-faring men who might be prepared to help Al Qaeda in sea-borne attacks; thirdly, the successful sea-borne terrorist strikes mounted by the Lashkar-e-Toiba (LET) on land-based targets in Mumbai from November 26 to 29,2008, and the failure of the Indian Navy and other Navies operating in the seas of the region to detect the plans of the LET and the movement of the LET boat carrying the terrorists from Karachi to Mumbai; and fourthly, the strengthening of physical security for land-based targets, which has necessitated the terrorists once again turning their attention to sea-based targets.


5. The enormous publicity, which the LET got for its sea-borne attack in Mumbai, demonstrated the propaganda value of sea-borne attacks, where the surprise element is more. It is to be expected that not only Al Qaeda, but also other Al Qaeda allied elements such as those of the Jemmah Islamiyah and the Yemeni and Somali members of Al Qaeda might once again be tempted to think in terms of acts of maritime terrorism to prove that their capabilities are intact.


6. It is in this context that one has to see reports from Singapore that an unidentified terrorist g.roup is planning attacks against oil tankers in the Malacca Strait.The Singapore Shipping Association has been quoted as saying on March 2,2010, that it had received an advisory from the Singapore Navy Information Fusion Centre about "an indication that a terrorist group is planning attacks on oil tankers in the Malacca Strait." It added: "This does not preclude possible attacks on other large vessels with dangerous cargo." The Navy Centre's advisory reportedly said:"The terrorists' intent is probably to achieve widespread publicity and showcase that it remains a viable group." It reminded shipping operators that the militants could use smaller vessels such as dinghies and speedboats to attack oil tankers. It recommended that ships should "strengthen their onboard security measures and adopt community reporting to increase awareness and strengthen the safety of all seafarers," according to the Association.


7. It is necessay for the Indian counter-terrorism agencies too and the Indian Navy and Coast Guard to re-focus on the likelihood of fresh sea-borne terrorist strikes against Indian targets either on land or on the high seas in the waters to the west of India. Protection of sealanes against pirates and terrorists acting separatrely of each other or in tandem and prevention and countering of acts of maritime terrorism require close regional co-operation with the navies of countries such as the US, Japan, China,Pakistan,Sri Lanka, the ASEAN and the Gulf Cooperation Council countries and Australia. Such co-operation should address issues such as intelligence collection and sharing, joint or co-ordinated operations, mutual assistance on the high seas, joint exercises etc. It is important for India to take the initiative in this matter.


8. The two joint counter-terrorism exercises between India and China held so far were land-based. The first was held in Yunnan and the second in Karnataka. The next Sino-Indian joint exercise should focus on co-ordinated action and mutual assistance against maritime terrorism with the involvement of the navies of not only India and China, but also the US, Singapore, Malaysia, Indonesia, Japan and Australia. We should not allow the continuing differences with China over the border dispute to come in the way of evolving a co-operative mechanism against maritime terrorism and piracy.


9. Our adversarial relationship with Pakistan would not permit us to think in terms of joint maritime counter-terrorism exercises with Pakistan, but intelligence-sharing arrangements should be possible and advisable despite the continuing serious differences between the two countries on the issue of Pakistani inaction against terrorism.We must develop slowly habits of mutual assistance with Pakistan----in the field of investigation of terrorism-related cases and prevention of maritime terrorist incidents.( 5-3-10)


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