Neutering & Defanging Chinese Threat (15-11-2017)

[Kati]

Someone is keeping tab on the Chinese spying cases .....

https://en.wikipedia.org/wiki/List_of_C ... ted_States

[SSridhar]

China ups aggression in South China Sea through military exercises - Dipanjan Roy Chaudhury, Economic Times

China is holding military exercises in the South China Sea (SCS) ahead of third anniversary of the PCA ruling in favour of Philippines reinforcing its claims in the world’s most critical trade route via sea.

The location of the drills as between the contested Paracel and Spratly island groups. China’s navy, coast guard and maritime militia are a constant presence in the region and it staged a massive fleet review in the area last year featuring its sole operating aircraft carrier, the Liaoning.

[Lisa]

the hans get hammered once again.

this is becoming boringly repetitive

Tanzania Suspends China-Funded $10 Billion Bagamoyo Port Project; Calls The Financing Terms ‘Exploitative’

Chetakji, For you to read, compare and contrast.

https://en.wikipedia.org/wiki/TAZARA_Railway

[chetak]

the hans get hammered once again.

this is becoming boringly repetitive

Tanzania Suspends China-Funded $10 Billion Bagamoyo Port Project; Calls The Financing Terms ‘Exploitative’

Chetakji, For you to read, compare and contrast.

https://en.wikipedia.org/wiki/TAZARA_Railway

much obliged, thanks Lisa ji.

[Peregrine]

X Posted on the Islamism & Islamophobia Abroad - News & Analysis Thread

https://youtu.be/GRBcP5BrffI



Cheers

[SSridhar]

Anti-China protests in the Philippines mark third anniversary of Manila’s South China Sea legal victory - South China Morning Post

Dozens of protesters on Friday staged a rally in front of the Chinese consulate in Manila as the Philippines marked the third anniversary of its arbitral victory over China at The Hague, which rejected Beijing’s historical claims to resources in the South China Sea.

They condemned President Rodrigo Duterte’s actions since the legal win as “unconstitutional” and called for his impeachment, while urging China to “get out” of the disputed waterway,

While presidential spokesman Salvador Panelo on Friday defended Duterte’s response to the ruling, most Filipinos agree with the protesters’ stance, according to a survey by private pollster Social Weather Stations.

The June 22 poll, also released Friday, found that 93 per cent of respondents thought it was important that the Philippines regain control of the islands occupied by China in South China Sea, while 89 per cent said “it is not right for the government to leave China alone with its infrastructure and military presence in the claimed territories”. . .

While it was thought The Hague ruling would have a bearing on these disputes, Duterte’s lack of action to enforce it, and his subsequent soft stance on dealing with Beijing, has enraged some quarters in the Philippines.

A June 26 statement from the palace, explaining that China would “allow” Filipino fishing near Scarborough Shoal, and a 2017 deal to allow Chinese fishing vessels into the Philippines’ EEZ, were two such deals.

The revelation about the EEZ only came to light last month when a Chinese fishing vessel rammed a smaller Philippine ship near the Reed Bank, abandoning 22 Filipino fishermen, who were later rescued by a Vietnamese shipping vessel.

The EEZ deal was “lopsided” as the steel-hulled Chinese fishing ships were bigger and better equipped than their Philippine counterparts, which had wooden hulls, according to Jay Batongbacal, director of the University of the Philippines’ Institute for Maritime Affairs and Law of the Sea. The maritime expert was speaking at a forum held by the NGO Stratbase to mark the ruling’s third anniversary.

Speaking to local media on Friday, presidential spokesman Panelo said Chinese President Xi Jinping had threatened war if Manila enforced The Hague ruling.

“Now if you’re the president, having heard that from the president of China, what do you do?” Panelo said. “So you turn to negotiate. You don’t go to war with them because you cannot win. You will be losing lives and property. So he is not violating the constitution, he is in fact enforcing [it and] protecting the Filipino people.”

So far, Duterte’s submissive stance on the South China Sea has not dented his popularity rating. His net satisfaction rating rose to 68 per cent in the second quarter of this year from 66 per cent in the first quarter.

Former Philippine foreign affairs secretary Albert del Rosario, who was blocked from entering Hong Kong last month, said in the Stratbase forum that Manila was being fooled into “succumbing to threats of force, including a threat of war”.

Del Rosario also noted that “with the recent clearer security guarantee definition provided by the US, it may not be necessary therefore to shrink to China’s threat of war”.

On the possibility of the Philippines going to war with China, former Philippine solicitor general Florin Hilbay said the country was negotiating from a position of weakness.

“I’ve never heard of any other country saying, ‘We’re gonna lose in a war and we cant do anything’. You don’t say that, at least not publicly,” he said during a televised forum with presidential spokesman Panelo on Friday.

“You are practically giving a blank check to China and they will do anything to take advantage of that very weak position because you have already given [them] everything.”

Meanwhile, an Asean forum of defence ministers on Thursday urged China and the Association of Southeast Asian Nations to agree on an “effective” code of conduct for the South China Sea. The ministers signed a declaration commending a recent maritime exercise between China and Asean, and announced that the regional bloc would hold a drill with the US next year.

[Peregrine]

X Posted on the Islamism & Islamophobia Abroad - News & Analysis Thread
https://www.youtube.com/watch?v=Oc5vVat5iuc

Cheers

[SSridhar]

China and Vietnam in stand-off over Chinese survey ship mission to disputed reef in South China Sea - SCMP

Chinese and Vietnamese coastguard vessels have been involved in a week-long confrontation over a reef in the South China Sea, risking the biggest clash between the two nations in five years.

The stand-off may trigger a wave of anti-China sentiment in Vietnam not seen since 2014, when a Chinese oil rig arrived off the disputed Paracel Islands.

Six heavily armed coastguards vessels – two Chinese and four Vietnamese – have been eyeing each other in patrols around Vanguard Bank in the Spratly group of islands since last week. About a dozen vessels were reported in the vicinity by marine tracking websites on Thursday.

The stand-off emerged despite a pledge in May by Chinese and Vietnamese defence ministers to settle maritime disputes by negotiation.

On Wednesday last week, Chinese survey ship Haiyang Dizhi 8 (Marine Geology-8) entered waters near the Vietnamese-controlled reef to conduct a seismic survey, Ryan Martinson, an assistant professor at the US Naval War College in Newport, Rhode Island, said in a tweet on Friday, citing ship tracking data.

Its escorts included the 12,000-tonne armed coastguard vessel 3901, complete with helicopter, and the 2,200-tonne coastguard ship 37111.

On Friday, Chinese foreign ministry spokesman Geng Shuang did not confirm a stand-off at Vanguard Bank, but he said China was determined to protect its interests in the South China Sea.

“We are also committed to managing our differences through negotiations with relevant countries,” Geng said.

President Xi Jinping meanwhile told visiting Vietnamese National Assembly chairwoman Nguyen Thi Kim Ngan that the two countries should “safeguard maritime peace and stability with concrete actions”.

Earlier on Friday, National People’s Congress chief Li Zhanshu told Nguyen that both sides should work together on a code of conduct for the South China Sea.

Relations between China and Vietnam were at their lowest ebb in a decade in May 2014, when the China National Offshore Oil Corporation moved oil platform Hai Yang Shi You 981 into waters near the Paracels. Vietnam sent vessels to stop the rig fixing to the seabed and were met by Chinese escort ships.

Beijing and Hanoi accused each other of allowing ships to ram opposing vessels. Anti-China protests swept Vietnam, and in southeastern Binh Duong province 14 factories owned by Chinese businesses were attacked.

Tensions eased in July that year, when China said the rig had finished its work and was withdrawn from the disputed waters.

Since then, the two countries have made efforts to improve relations. In May, Chinese Minister of National Defence General Wei Fenghe visited Hanoi, pledging with his Vietnamese counterpart that both nations would maintain stability in the South China Sea.

Vanguard Bank is the westernmost reef of the Spratlys and sits within what Hanoi claims is 200 nautical miles of its exclusive economic zone. That claim is contested by Beijing and Taiwan.

The Vanguard Bank basin is known to have rich oil and gas reserves, and Vietnam has dozens of oil rigs operating in the area. In 1994, armed Vietnamese vessels forced Chinese survey ship Shiyan 2 (Experiment 2) from the area after a three-day stand-off.

China claims most of the South China Sea, but that is contested in places by Vietnam, the Philippines, Malaysia and Brunei.

In the past few years, Beijing has built and reclaimed seven islands on reefs under its control in the Spratlys and deployed troops and weapons to strengthen its claim over natural resources and trade routes in the area.

The latest stand-off came as China bolstered the role of its coastguard, which has been under military control since July last year and has been preparing for confrontations in disputed waters.

Collin Koh, a research fellow at the S Rajaratnam School of International Studies at Nanyang Technological University in Singapore, said China and Vietnam were likely to refrain from “untoward actions that may escalate the situation into a clash”.

“Especially for China, an escalated situation may carry consequences such as a fallout in ties with Vietnam and potential difficulties that can be anticipated, especially when Hanoi takes on the chairmanship of the Association of Southeast Asian Nations (Asean) later this year,” he said.

“That would go against the narrative that China’s been trying to shape, which is that the South China Sea is peaceful and stable and can be managed properly without needing extra-regional intervention.

“So we might imagine an escalation at Vanguard will shatter that myth. Of course, this applies to Asean as well, although Beijing is more concerned about it because of its abhorrence towards external intervention in the South China Sea,” Koh said.

[chetak]

in the maldives, the cheeni dragon doing business the OBOR way.

twitter

“For the bridge, GMR gave us a quotation for $77 million and the Chinese gave us a bill for $300 million....we are seeing in other countries, they are asking for equity and with that we relinquish land and sovereignty”

[darshan]

Govt of India approves construction of India’s largest hydroelectric project in Arunachal Pradesh
https://www.opindia.com/2019/07/govt-of ... l-pradesh/
Dibang Multipurpose Project is a hydropower cum flood moderation scheme proposed on Dibang River in Lower Dibang Valley District of Arunachal Pradesh. Apart from producing electricity, the project will moderate flood in areas downstream of the Dibang Dam during the monsoon session. The plant will produce 2880 MW of electricity, making it the largest hydel power in the once completed. It is estimated that the project will produce 11223MU of energy in a 90% dependable year. The Dam constructed for the project will be 278-meter-high, making it tallest in the country.

[SSridhar]

China promises greater market access to India if it improves RCEP offer - Amiti Sen, Business Line

China has dangled a carrot before India to make it improve its market liberalisation offer under the Regional Comprehensive Economic Partnership (RCEP) pact by offering to open its own market even more, but New Delhi is cautious. {India has to be more than just being 'cautious'. We have to outright reject this proposal. Two reasons for that. One, China cannot link a bilateral issue with a multilateral agenda. Period. Two, past history proves that Chinese promises are humbug. We have seen the colour of Chinese money before and that never looked good or appetizing.}

In the one-on-one talks between the two countries, that are part of the 16-member proposed regional bloc, China has said that if India went beyond its current offer of eliminating tariffs on about 74 per cent items for the country, it would not only match it but commit to a higher number, an official told BusinessLine.

India, however, is apprehensive that its industry will not be able to make as much gains from the tariff elimination under RCEP as the Chinese already have a head-start which is reflected in the $54-billion trade surplus China has over India.

Most of the countries that are part of the RCEP, including the 10-member ASEAN, Japan, South Korea, Australia and New Zealand, are pushing India to decide on its market opening offer for China as early as possible {Everyone wants to make money out of India and at India's cost. It's as simple as that. China might come in handy even when Japan & Oz might want India to checkmate China otherwise. This is brutal realpolitik} as that was holding the rest of the negotiations back.

Members keen on pact

Members are keen to have the RCEP agreement in place by the end of this year and a three-member team comprising Trade Ministers from Indonesia and Thailand and the ASEAN Secretary General was in New Delhi last week to meet Commerce & Industry Minister Piyush Goyal in order to fast-track decision making.

Although India is also not eager to open its markets for Australia and New Zealand, to the same extent as for the ASEAN, Japan and South Korea with which it has bilateral free trade agreements, it is most cautious about China as the Indian industry feels most threatened by it.

“Last fiscal, China exported goods worth $70 billion to India while India’s exports to the country was $16 billion. Following tariff liberalisation, exports of both countries would go up but the apprehension is that China’s increase would be proportionately much higher than that of India’s and the trade deficit would balloon,” he said.

As per China’s latest offer, if India increased its offer to eliminate tariffs for substantially more items (Beijing is pushing for over 90 per cent) than its existing offer, it could eliminate tariffs on 5-7 per cent more goods for India.

“The problem is that the Indian industry is more focussed on protecting its domestic market from Chinese goods rather than increase its presence in the Chinese market,” the official said.

The Indian industry, especially the steel, textile, automobile and engineering goods sectors, has already requested the government to keep ambitions very low as far as China is concerned. In a recent meeting with the Commerce & Industry Ministry, industry representatives asked the government to stick to the initial offer of eliminating duties on 42 per cent of items imported from China.

Once implemented, the RCEP could be the largest free trade zone in the world as member countries account for 25 per cent of global GDP, 30 per cent of global trade, 26 per cent of global foreign direct investment (FDI) flows and 45 per cent of the total population.

Trade Ministers from all ASEAN countries will meet in China early next month to take stock of the current negotiations and put an informal time-line for its conclusion.

[Peregrine]

China’s debt at 303% of GDP, 15% of global total: Report – Reuters

NEW DELHI: A key gauge of China's debt has topped 300% of gross domestic product, according to the Institute of International Finance (IIF), as Beijing steps up support for the cooling economy while trying to contain financial risks.

China's total corporate, household and government debt rose to 303% of GDP in the first quarter of 2019, from 297% in the same period a year earlier, the IIF said in a report this week which highlighted rising debt levels worldwide.

The IIF is a private global financial industry association, based in Washington.

"While authorities' efforts to curb shadow bank lending (particularly to smaller companies) have prompted a cutback in non-financial corporate debt, net borrowing in other sectors has brought China's total debt to over $40 trillion - some 15% of all global debt," the report said.

"Of note, onshore bond issuance suggests a big pickup in borrowing by local governments and banks this year."

China's economic growth slowed to 6.2% in the second quarter, its weakest pace in at least 27 years, as demand at home and abroad faltered in the face of mounting US trade pressure.

To revive investment and protect jobs, Beijing has been encouraging banks to lend more, particularly to struggling smaller firms. It has also unveiled billions of dollars in tax cuts and infrastructure spending.

In the first half of this year, local governments' total net bond issuance reached 2.1765 trillion yuan ($316.5 billion), the finance ministry said on Tuesday.

Chinese officials have said repeatedly said debt risks are manageable overall.

Cheers

[g.sarkar]

https://www.spiegel.de/international/bu ... 75643.html
The World's Bank
Vast Chinese Loans Pose Risks to Developing World
China is the largest creditor in the world, funding infrastructure projects in the developing world in exchange for access to raw materials. A new study shows that the risk of a new debt crisis is significant.
By Bartholomäus Grill, Michael Sauga and Bernhard Zand
The future rail link cuts its way through the jungles of Laos for over 400 kilometers. Soon, trains will be rolling through -- over bridges, through tunnels and across dams built just for the line, which runs from the Chinese border in the north to the Laotian capital of Vientiane on the Mekong River. After five years of construction, the line is set to go into service in 2021. And the Chinese head of one of the sections has no doubt that it will be finished on time. "Our office alone employs 4,000 workers," he says. There is also no lack of money: The Chinese government in Beijing has earmarked around 6 billion dollars for the project and has recently become both Laos's largest creditor and most significant provider of development aid. After five years of construction, the line is set to go into service in 2021. And the Chinese head of one of the sections has no doubt that it will be finished on time. "Our office alone employs 4,000 workers," he says. There is also no lack of money: The Chinese government in Beijing has earmarked around 6 billion dollars for the project and has recently become both Laos's largest creditor and most significant provider of development aid. China, after all, isn't just directly financing 70 percent of the new train lain, it is also building dams, schools, military hospitals and has even launched a communications satellite into space for the country. In April, Beijing loaned Laos another 40 million dollars for road construction -- a credit that was provided through the multilateral Asian Infrastructure Investment Bank based in Beijing, a financial institution that China established as an alternative to Western development banks.
If Hong Kong is included, China isn't just the largest creditor in Laos, but in the entire world. Beijing's foreign loans dominate global markets almost to the same degree as its toys, smartphones and electric scooters do. From Kenya to Montenegro, from Ecuador to Djibouti, roads, dams and power plants are being built with billions in loans from Beijing. And all of those countries will have to pay back those loans in the years to come. With interest.
The flood of capital from China helped prevent the global economy from plunging into depression following the bankruptcy of Lehman Brothers and the ensuing financial crisis. But it isn't without controversy. For some, the billions of dollars from China are a welcome contribution to helping many underdeveloped regions in Asia and Africa expand infrastructure. For others, the loans from Beijing have forced half the world into economic and political dependency on Beijing. Some have described the situation as "debt bondage," while a group of U.S. senators wrote a letter to Secretary of State Mike Pompeo last summer warning of China's "attempt to weaponize capital."
A Lack of Transparency
Furthermore, little is actually known about the loans. China's foreign assets are now worth $6 trillion, but outside of the government in Beijing, nobody knows much about where that money has been invested and what conditions and risks are attached. Because China doesn't completely open its books to international organizations like the World Bank and the International Monetary Fund (IMF), there is a lack of needed transparency, says IMF head Christine Lagarde. Now, though, with the release of a new study by a German-American team of academics under the leadership of Harvard professor Carmen Reinhart, Largarde will have a clearer picture. For months, the economists dug through both known and unknown source material, compiling the most comprehensive analysis yet of Chinese foreign loans. And the image that has resulted does nothing to assuage concerns about the financial power being exerted by Beijing. On the contrary: The data shows that many countries in the poorer regions of the world have accepted far more credit from China than previously known. And the loans frequently come with onerous conditions that are strongly oriented toward Beijing's strategic interests and increase the risk that many countries in the developing world could plunge into financial crisis. "The West still hasn't understood how profoundly China's rise has changed the international financial system," says Christoph Trebesch, a co-author of the study from the Kiel Institute for the World Economy.
.....
Gautam

[tandav]

This is historically how imperial China has expanded, Northern Chinese Mandarin speaking empires made roads to Southern Manchuria and within a century southern state speaking cantonese became part of China. Today modern china is applying an ancient formula to gain territory.

https://www.spiegel.de/international/bu ... 75643.html
The World's Bank
Vast Chinese Loans Pose Risks to Developing World
China is the largest creditor in the world, funding infrastructure projects in the developing world in exchange for access to raw materials. A new study shows that the risk of a new debt crisis is significant.
By Bartholomäus Grill, Michael Sauga and Bernhard Zand
The future rail link cuts its way through the jungles of Laos for over 400 kilometers. Soon, trains will be rolling through -- over bridges, through tunnels and across dams built just for the line, which runs from the Chinese border in the north to the Laotian capital of Vientiane on the Mekong River. After five years of construction, the line is set to go into service in 2021. And the Chinese head of one of the sections has no doubt that it will be finished on time. "Our office alone employs 4,000 workers," he says. There is also no lack of money: The Chinese government in Beijing has earmarked around 6 billion dollars for the project and has recently become both Laos's largest creditor and most significant provider of development aid. After five years of construction, the line is set to go into service in 2021. And the Chinese head of one of the sections has no doubt that it will be finished on time. "Our office alone employs 4,000 workers," he says. There is also no lack of money: The Chinese government in Beijing has earmarked around 6 billion dollars for the project and has recently become both Laos's largest creditor and most significant provider of development aid. China, after all, isn't just directly financing 70 percent of the new train lain, it is also building dams, schools, military hospitals and has even launched a communications satellite into space for the country. In April, Beijing loaned Laos another 40 million dollars for road construction -- a credit that was provided through the multilateral Asian Infrastructure Investment Bank based in Beijing, a financial institution that China established as an alternative to Western development banks.
If Hong Kong is included, China isn't just the largest creditor in Laos, but in the entire world. Beijing's foreign loans dominate global markets almost to the same degree as its toys, smartphones and electric scooters do. From Kenya to Montenegro, from Ecuador to Djibouti, roads, dams and power plants are being built with billions in loans from Beijing. And all of those countries will have to pay back those loans in the years to come. With interest.
The flood of capital from China helped prevent the global economy from plunging into depression following the bankruptcy of Lehman Brothers and the ensuing financial crisis. But it isn't without controversy. For some, the billions of dollars from China are a welcome contribution to helping many underdeveloped regions in Asia and Africa expand infrastructure. For others, the loans from Beijing have forced half the world into economic and political dependency on Beijing. Some have described the situation as "debt bondage," while a group of U.S. senators wrote a letter to Secretary of State Mike Pompeo last summer warning of China's "attempt to weaponize capital."
A Lack of Transparency
Furthermore, little is actually known about the loans. China's foreign assets are now worth $6 trillion, but outside of the government in Beijing, nobody knows much about where that money has been invested and what conditions and risks are attached. Because China doesn't completely open its books to international organizations like the World Bank and the International Monetary Fund (IMF), there is a lack of needed transparency, says IMF head Christine Lagarde. Now, though, with the release of a new study by a German-American team of academics under the leadership of Harvard professor Carmen Reinhart, Largarde will have a clearer picture. For months, the economists dug through both known and unknown source material, compiling the most comprehensive analysis yet of Chinese foreign loans. And the image that has resulted does nothing to assuage concerns about the financial power being exerted by Beijing. On the contrary: The data shows that many countries in the poorer regions of the world have accepted far more credit from China than previously known. And the loans frequently come with onerous conditions that are strongly oriented toward Beijing's strategic interests and increase the risk that many countries in the developing world could plunge into financial crisis. "The West still hasn't understood how profoundly China's rise has changed the international financial system," says Christoph Trebesch, a co-author of the study from the Kiel Institute for the World Economy.
.....
Gautam

[SSridhar]

Vietnam says Chinese oil survey vessels violated its sovereignty - Reuters

Vietnam said on Friday a Chinese oil survey vessel and its escorts had conducted activities in Vietnam's exclusive economic zone and continental shelf that violated its sovereignty.

Vietnam has demanded China stop the “unlawful activities” and that its ships leave Vietnamese waters, the Ministry of Foreign Affairs spokeswoman Le Thi Thu Hang said in a statement.

Ms. Hang's statement comes days after two Washington-based think-tanks said Vietnamese and Chinese ships had been engaged in a weeks-long standoff near an offshore oil block in disputed waters of the South China Sea, which fall within Vietnam's exclusive economic zone.

[SSridhar]

China proposes united front with India and emerging economies to counter trade headwinds - Atul Aneja, The Hindu

Ahead of the next informal summit between Prime Minister Narendra Modi and Chinese President Xi Jinping, China has flagged its interest in partnering India for building a united front of emerging economies and developing countries to counter trade headwinds.

Amid a spiralling trade war with the U.S., Chinese ambassador-designate to India, Sun Weidong, told resident Indian journalists on Friday that “the ugly path of unilateralism and protectionism has now affected the growth and stability of the world economy.”

“This will surely have an impact on the emerging markets and the developing countries because it also based on the international order that they rely on,” he observed. Seeking a bigger partnership with India on a global scale, Mr. Sun said on the eve of his departure to New Delhi that China and India had a “historical” duty to become frontrunners in protecting multilateralism and globalisation.

He pointed out that the scale and impact of this initiative should echo the success of Panchsheel — the five principles of peaceful coexistence nailed by the two countries in the 1950s — which became the template for guiding state-to-state relations.

“China and India are the only two emerging markets and developing countries in the world that have a population of over 1 billion. So while upholding our legitimate rights and interests, we have to shoulder our historical responsibility in terms of safeguarding peace, stability and prosperity for the world…,” Mr. Sun observed.

The Chinese envoy specially flagged the reform of the World Trade Organisation, the defence of the U.N. system, cyber-security, and climate change as the arena for China-India collaboration in the future.

India and China reset their ties last year at the Wuhan informal summit, after the two countries nearly came to war in 2017, during the Doklam military stand-off. But with the next edition of the informal summit slated later this year, Mr. Sun was emphatic that the time had arrived when the two neighbours should move away from merely “managing” their differences to a stage of active partnership, capable of yielding an “Asian Century”.

“The Chinese people are now in an endeavour for (realising) the first millennium goal, and at the same time Prime Minister (Narendra) Modi has come out with the vision of the new India. That means our two countries are in a similar development stage; we share similar goals for our development and that enables us to share very extensive and in-depth common interests.” {The two countries are not in a similar development stage and the goals are not the same}

Mr. Sun stressed that the Chinese side was “willing to work with India to enhance our strategic mutual trust, step up our all-dimensional cooperation, to lend support to each other’s development so as to realise the mutual dancing of the Chinese dragon and the Indian elephant and to make our joint efforts for the emergence of the Asian century.”

The Chinese envoy spotlighted that the two countries must grasp “the overriding trend of the changes in the current world landscape and to properly understand the stage of our own developmental process and bear in mind the long-term picture so as to take initiative in shaping our bilateral relationship.” {He is suggesting that India should be mindful of China as the latter is the future}

Asked to comment on bridging the trade gap between the two countries — a concern shared by Prime Minister Modi and President Xi during their meeting last month in Bishkek on the sidelines of the Shanghai Cooperation Organisation summit — Mr. Sun said China “ highly values” India’s concerns on the trade imbalance. But he also made it plain that Beijing has “never deliberately created a trade surplus against India.”

He pointed out that from last year, China had increased imports of Indian rice and sugar, along with stepping up the review and approval process of the Indian pharmaceuticals. “I am convinced that with our concerted efforts, the issue of trade imbalance between China and India will be gradually addressed.”

On the resolution of the border issue, Mr. Sun reiterated that the dialogue among the Special Representatives of the two countries, which began in 2003, had yielded the political principles guiding the resolution of the boundary row. Besides, “the basic principle of a package planned though mutual adjustment to resolve the boundary issue” had been identified.

Commenting on managing India and China’s overlapping interests in the Indian Ocean and South Asia, the Chinese envoy pointed to the “China-India plus” mechanism “to better build regional infrastructure connectivity and to ensure better synergy of policies and strategies between countries.”

After the Wuhan summit, China had proposed a joint approach with India to address some of the major issues in the region, including the Rohingya refugee crisis along with possible initiatives in Nepal, Afghanistan and Iran. On a personal note, Mr. Sun said he looked forward to working with External Affairs Minister S. Jaishankar, with whom he had interacted when he had been posted in Beijing as India’s Ambassador to China. “We worked closely together. So I really hope that in the new tenure of your government, this relationship will be further promoted through our common and mutual efforts.”

[SSridhar]

How to Confront an Advancing Threat From China - Nikki Haley, Foreign Affairs
Excerpt

A NEW STRATEGY FOR A NEW STRUGGLE

Since the United States emerged as the world’s leading power, we have never had to contend with a potential military challenger that was also our most important trading partner. In the Cold War, we confronted a Soviet Union whose economy was a fraction of the size of China’s today. History offers no close analogies, but that doesn’t mean it offers no lessons.

During the Cold War, our government crafted new policies and programs to check Soviet military technological progress and weaken the Soviet economy. These included export control and trade promotion programs that served national security purposes. We created the U.S. Information Agency, which countered Soviet propaganda, and the Strategic Defense Initiative, which aimed to neutralize the Soviet Union’s long-range nuclear-armed missiles. We also established programs to encourage higher education in relevant areas—for example, the Russian language and nuclear weapons technology.

To counter Chinese threats to U.S. vital interests, it is necessary for us to think creatively and courageously—and without any illusions about our adversary’s intentions. To begin with, we should revise our regulations on trade and investment, especially in the high-tech sector, so that China can no longer exploit our openness. In general, I dislike government interference in private business. But our national security takes precedence over free-market policies. Adam Smith made this point in The Wealth of Nations, arguing that Great Britain’s interest in preserving naval supremacy was more important than free trade in the maritime sector: “Defense,” he wrote, “is of much more importance than opulence.” With China committed to taking military advantage of all private commercial activity, we must alter the lens through which we examine U.S. regulation of foreign trade, international supply chains, inward investments, intellectual property protection, and incentives for critical defense technologies. The necessary regulation will be expensive and onerous, but it is the price we must pay to secure our country.

Even as we adjust our economic policies, we will also need to improve our diplomacy. The radical nature of China’s national security strategy has become clear only in the last few years. As we rethink our own national security strategy in response, we have an interest in encouraging our allies to rethink theirs. Congress should ensure that U.S. officials have the authority and resources they need to promote understanding of China’s strategy and to rally multilateral efforts to compete with it—to counter Chinese influence, to defend against military threats, and to preserve the principles on which the prosperity-promoting post–World War II international system was constructed.

To handle threats posed by China—as well as by Russia, North Korea, Iran, and jihadist terrorist networks, among others—we must strengthen our military. We need greater naval capability, more long-range air strike forces, and improved information technology and cyber-capabilities. We must also modernize our long-neglected nuclear infrastructure.{The withdrawal from INF treaty is the first step} The U.S. defense budget is huge, but not enough is allocated for capital investment. With limited resources, there will always be tradeoffs. But we must always be able to respond, in strong and measured fashion, to our most militarily sophisticated adversary.

China poses intellectual, technological, political, diplomatic, and military challenges to the United States. The necessary response is similarly multifaceted, requiring action in fields as disparate as intelligence, law enforcement, private business, and higher education. In recent years, many problems have been described as requiring “whole of government” responses. China requires a response that is not just “whole of government” but “whole of nation.” Fortunately, there is support across the political spectrum for countering China’s new aggressive policies. We must act now, before it’s too late. The stakes are high. They could be life or death.

[hnair]

And so it begins:

X-posting

Peter Zeihan has some interesting analysis on the Hong Kong protests:


https://us11.campaign-archive.com/?u=de ... 557eb8dbd5

https://us11.campaign-archive.com/?u=de ... 49b9610ebe

If zeihan is right, the world is in for a very interesting next few decades.

Thanks for posting. We had this happen today:

Chaos and bloodshed in Hong Kong district as hundreds of masked men assault protesters, journalists, residents

Hong Kong protests: Armed mob violence leaves city in shock

A contact in HK's international press says the general word that the violence by Xi has been outsourced to Triads is confirmed. There is even a uniform (white shirt), so the anti-riot cops can identify them when times comes to mop up the anti-CPC civvies. Seem like they did learn lessons from Tianenmen, but still loves the strong arm tactics more than subtle misinformation and disruption. Need to see how that pans out in this age of communications

[ArjunPandit]

behind paywall but still should give general sentiment
https://www.wsj.com/articles/china-lets ... 1563793760

Ford’s Shrinking China Business Is Hurting Its Global Ambitions

SHANGHAI—Ford Motor Co.’s multibillion-dollar push to expand in China this decade has veered off course, leaving it mired in a sales slump that is weighing on its future in the world’s largest auto market.

The No. 2 Detroit auto maker’s sales in China fell 27% in the first six months of 2019 from the prior-year period, as a downturn in the Chinese car market extended to a 12th month in June. The sharp drop-off in China auto sales—the industry’s first since Beijing opened the market to foreign car companies in the 1980s

[darshan]

Huawei allegedly developed a spy-friendly phone network for North Korea
https://www.engadget.com/2019/07/22/hua ... e-network/
If Huawei was hoping to mend its reputation in the wake of the de facto US ban, it's about to be disappointed. The Washington Post and 38 North have published joint reports indicating that Huawei helped build Koryolink, North Korea's highly restrictive cellphone network that went live in 2008. According to documents, Huawei partnered with China's state-owned Panda International Information Technology on projects in North Korea for at least eight years, with cooperation starting when then-dictator Kim Jong Il visited Huawei's headquarters in 2006. Huawei provided elements like cellular infrastructure, network management and encryption, while Panda provided software and transported Huawei gear.

The concern isn't just that Huawei was supporting a oppressive dictatorship, but that it may have flaunted laws and sanctions while doing so. Experts believe that Huawei's 3G gear for Koryolink used at least some US components. As Panda was banned from receiving US-origin equipment in 2014, Huawei may have violated the American export ban if any of its gear included at least 10 percent American content. The tech giant was apparently determined to keep its North Korean work quiet, having codenamed the country "A9" to avoid obviously damning evidence. Iran (which Huawei allegedly courted despite US sanctions) and Syria received similar codenames.

[ArjunPandit]

https://www.scmp.com/economy/china-econ ... -trade-war
now deflation threat in china..IIRC similar concerns preceded FSU before afghanistan war

[ArjunPandit]

Interesting take on risks staring chinese economy..the line i loved most was
"he slowdown in China has nothing to do with the tariffs, but more with the Harvard educated central bankers of China finally saying “no more credit expansion.” "
https://www.forbes.com/sites/christophe ... c24f6a4315

[wig]

https://www.tribuneindia.com/news/comme ... 06613.html

Dalai Lama’s plans: India should weigh options

the article is informative
extracts

Long back, in 1933, the previous Dalai Lama feared that the Tibetan political system would soon disappear without a trace. No sooner, Indian Consul in Lhasa Sumal Sinha noted that the Tibetan political elite were making fortunes by collaborating with the Chinese and the Dalai Lama’s authority had “lost all its generals.”
But one thing is clear: The Tibetan lobby in the West has a track record of ensnaring India in its murky agenda, often at the cost of India’s national interests.

On his part, the Dalai Lama has been lately giving interviews that indicate his growing anxiety. Recently, he said the Tibetan issue was no longer a struggle for political independence. This was probably meant to please China and simultaneously and indirectly pressure India. To build further pressure on China, he has threatened to decide his next birth and also hinted at taking a rebirth in India this time around.

interesting history

It must be underlined that it was the Mongol ruler Gushi Khan who invented the idea of creating the entity of the Dalai Lama and the institution of the Ganden Phodrang authority in 1642 — post-facto, starting from the 5th Dalai Lama.

Subsequently, during the Manchu Qing rulers' regime (1644-1912), the Mongol-Tibetan-Manchu trio formally created a new celestial and devotional order under the unified command of the Tibetan Gelug-pa sect, headed by the Dalai Lama and aided by the Panchen Lama.

The duo Tibetan Lamas served as valued intermediaries and tools for the Qing Empire's expansion from 1720 until 1912, thereby helping the Peking court create a peripheral imperial tributary influence over Mongolia, Buryatia, Manchuria, Yunnan, Northern Burma and the Himalayas. Thus, the Gelug history is largely associated with the history of the Qing Empire's expansion and influence.

The Tibetans admired the Chinese culture, thrived on Chinese money and used Chinese imperial military to subjugate the territories of others, including the kingdoms of the Himalayas. American Orientalist Owen Lattimore has characterised that Tibet's supreme pontiffs politically acted throughout as agents of one or another alien overlord. This was what the tributary or feudatory status of Tibet exactly meant.

The medieval-era Tibetan feudatory Ganden Phodrang regime that long served as a front of the imperial court ultimately failed Tibet and its people. Its supporters, including 100,000 exiles, continue to cause quarrels. Why should the national interests of Tibet, China and India suffer? Clearly then, India so far either had no independent Tibet policy of its own or it was dependent on Western assessments or had heavily weighed in the Dalai Lama's thinking. Instead of relying on knowledge rooted in India’s own experiences, especially on the statecraft carefully evolved during the British period, India’s policy objective for the Himalayas and Tibet is subservient to the US policy goals. Time has come to change that.

[siqir]

what was so especially great about the british period statecraft and how is that called rooted in indian experience

my suggestion is to give the refugees including dl the option of becoming full indian citizens or ask them to move back home or move on to greener pastures in europe or americas and no more gov in exile

who is next dl is none of indian gov business just leave that to the people wherever they are

[uskumar]

who is next dl is none of indian gov business just leave that to the people wherever they are

I believe by letting China dictate next do, we will loose a important card in negotiations. Tibet card needs to be used in border negotiations with China. Let us not forget we have genuine interest in Buddhism. It was born here. It is after all widely practiced in near East and India has chance of becoming Mecca for Buddhism, a spiritual figurehead of Buddhist so to speak. Dl will need to be in India for that.

[SSridhar]

Created ‘favourable conditions’ to resolve Doklam standoff: China - PTI

The Chinese military on July 24 said it is striving to promote security and stability along the India-China border and has created “favourable conditions” to resolve the Doklam standoff in 2017.

A white paper titled ‘China’s National Defence in the New Era’, released by the Chinese Defence Ministry in Beijing touched upon various aspects of its military development comparing with India, U.S., Russia and other countries.

India-China border

About the situation at the Sino-Indian border, the white paper said the Chinese military “strive to promote stability and security along the border with India, and taken effective measures to create favourable conditions for the peaceful resolution of the Donglang [Doklam] standoff”.

The reference to Doklam in the white paper was significant in the backdrop of the reports that China continued to reinforce its troops not far from the standoff site.

The standoff began when Indian troops objected to the People’s Liberation Army (PLA) building a road close to the narrow Chicken Neck corridor connecting with the North-Eastern states in an area also claimed by Bhutan.

The standoff, which led severe disruption of relations between the two countries, was finally resolved after the PLA stopped the road construction, following which India withdrew its troops.

The standoff led to both the countries revamping their ties with the first ever informal summit between Prime Minister Narendra Modi and Chinese President Xi Jinping in Wuhan in 2018 which paved the way for the normalisation of the ties.

President Xi is due to visit India later this year for the second informal summit, which is expected to further solidify the relations between the two countries.

India-China border dispute covered 3,488 km and the two countries have so far held 21 rounds of talks to resolve the issue.
Global military competition

The white paper also highlighted the intensification of competition between the two million strong Chinese military with that of its counterparts in India, U.S., Russia and other countries.

“Global military competition is intensifying. Major countries around the world are readjusting their security and military strategies and military organisational structures. They are developing new types of combat forces to seize the strategic commanding heights in military competition,” it said.

The U.S., the white paper noted, is engaging in technological and institutional innovation in pursuit of absolute military superiority.

Russia is advancing its ‘New Look’ military reform, while the U.K., France, Germany, Japan and India are re-balancing and optimising the structure of their military forces.

“Driven by the new round of technological and industrial revolution, the application of cutting-edge technologies such as artificial intelligence [AI], quantum information, big data, cloud computing and the Internet of Things are gathering pace in the military field,” it said.

The white paper noted that the international military competition is undergoing historic changes. New and high-tech military technologies based on IT are developing rapidly. There is a prevailing trend to develop long-range precision, intelligent, stealthy or unmanned weaponry and equipment.

“War is evolving in form towards informationised warfare, and intelligent warfare is on the horizon,” it said.

Defence expenditure

The defence white paper also sought to play down heavy military expenditure, saying that China is spending less on defence budgets in terms of GDP in comparison to India, U.S. and other countries.

According to the Stockholm International Peace Research Institute (SIPRI), the leading international defence think tank, China, the second-largest spender of defence in the world, increased its military expenditure by 5.0% to $250 billion in 2018 against India’s $66.5 billion.

The U.S., which is the largest spender of defence, spent $649 billion in 2018.

Arguing that China’s defence expenditure is reasonable and appropriate, the white paper stated that the country attends to both development and security.

“It is making an integrated effort to build a prosperous country and a strong military, and striving for the coordinated development of national defence and the economy,” it said and claimed that China’s defence expenditure is open and transparent.

Compared to other major countries, the ratios of China’s defence expenditure to GDP and to government expenditure, as well as the per capita defence expenditure of the country, remain at a relatively low level, it said.

As the only major country yet to be completely reunified, and one of the countries with the most complex peripheral security environment, China faces serious challenges in safeguarding national sovereignty, territorial integrity, and maritime rights and interests, the white paper said.

China is moving closer to the centre of the world stage, and the international community expects more international public security goods from the Chinese military, it said.

There is still a wide gap between China’s defence expenditure and the requirements for safeguarding national sovereignty, security and development interests, for fulfilling China’s international responsibilities and obligations as a major country, and for China’s development.

In step with national economic development, defence expenditure of China will maintain a moderate and steady growth, the white paper said.

[gaurav.p]

Attacking the Heart of the German Industry

For a number of years now, a group of professional hackers has been busy spying on businesses all over the world: Winnti. Believed to be controlled by China. For the first time, in a joint investigation, German public broadcasters BR and NDR are shedding light on how the hackers operate and how widespread they are. — by Hakan Tanriverdi, Svea Eckert, Jan Strozyk, Maximilian Zierer and Rebecca Ciesielski

High time, to start recruiting in defensive and offensive cyber operations than being just paperwork. And making people aware about the cyber attacks.

[Kati]

Cybersecurity
FBI Chief Says China Is Trying to ‘Steal Their Way’ to Dominance

https://www.bloomberg.com/news/articles ... olitics-vp

[darshan]

No more Muslim Solidarity? Pakistan, Saudi Arabia and 48 others write a letter to UN, backing China’s treatment of Uyghur Muslims
https://rightlog.in/2019/07/muslim-uygh ... letter-01/
Several Muslim majority nations coming in support of China in this regard and more so several nations like Pakistan, Saudi Arabia, Iran and UAE praising the Communist nation raise serious questions over their calls for solidarity with the Muslim community around the world. These events just expose the sheer hypocrisy of nations like Pakistan who on one side cry against nations like India for their counter terror operations against internationally recognized terrorist organizations while at the same time turn a blind eye towards the detention of ethnic Muslim groups and the desecration and their religious freedoms.

While China faces mounting international pressure over its record of human rights violations, continuing with the trend Muslim countries like Pakistan, Turkey, Saudi Arabia and other nations have clearly placed their geo-political agendas before human rights, their claims of being the custodians of Islamic rights also stand exposed as diplomatic pressure and greed of economic incentives have made them bury their heads in the sand against China’s blatant violation of human dignity of millions of Uyghur Muslims. Nations like Pakistan and Saudi Arabia also stand exposed as they had pressurized European nations to take in refugees while they evaded any responsibility towards the refugees. These Islamist nations play politics of convenience and use the Muslim victim card only when it serves their geo-political and economic agenda. Clearly, a powerful country like China has been given the pass to be as authoritarian with Muslims as it likes by Islamist nations, revealing a blatant case of pretence of solidarity with Muslims on the part of countries like Pakistan, Iran, Saudi Arabia, Turkey and others.

[SSridhar]

Vietnam briefs India on standoff with China in South China Sea - Dinakar Peri, The Hindu

Vietnam has apprised India of its standoff with China in the South China Sea (SCS) where the two have overlapping claims, Vietnamese diplomatic sources said on Monday. The situation is of particular concern to India given the commercial interests of the Oil and Natural Gas Corporation (ONGC) in the region.

Diplomatic sources said since July 4, a Chinese seismic survey vessel Haiyang Dizhi 8, escorted by a number of Coast Guard and fishing vessels, has conducted marine seismic surveys and remained within the 200 nautical miles Exclusive Economic Zone (EEZ) claimed by Vietnam as per the 1982 United Nations Convention on the Law of the Seas (UNCLOS). China claims most of the SCS till the nine-dash line.

“We have briefed the Ministry of External Affairs (MEA) about the incident. We are waiting for an official statement,” a diplomatic source said on condition of anonymity. The incident occurred on July 4 but Vietnam has not made it public till China let it out last week as we wanted to settle the issue, the source said and following that, “We have been asked to seek countries which have interest in the region and seek their support.”

No word from Ministry

The Ministry has declined comment on the issue.

The source stressed on a response from India as it is a major player and also has direct interests as a major part of its cargo transits through the region. India is also a member of the global platforms, the source said adding that “It is the moment for Quad to play its part” in resolving the issue, referring to the Quadrilateral grouping India, Australia, Japan and the U.S.

Incidentally, the standoff area is about 100 nautical miles away from Oil Block No. 06/1 where joint ventures for regular oil and gas production among Petro Vietnam, Russia’s Rosneft and the ONGC have been in place for 17 years. Other Indian private companies are also looking for oil exploration.

Last week, Beijing called Hanoi to respect its claims to the region. Vietnam said it has made contact with China on multiple occasions via different channels, delivered diplomatic notes to oppose its violations and “staunchly demanded China to stop all unlawful activities and withdraw its ships from Vietnamese waters”.

This is the most serious incident between the two countries after the standoff in May 2014 when the China National Petroleum Corporation moved an oil platform into waters claimed by Vietnam.

In a strongly worded statement, the U.S. State Department called on China to “cease its bullying behaviour and refrain from engaging in this type of provocative and destabilising activities”.

Diplomatic sources said as per UNCLOS and the final award of the Permanent Court of Arbitration (PCA) in the Philippines vs. China case in 2016, features in the Spratly Islands do not generate 200 nautical miles of its maritime zones and also rejected China’s nine-dash line claim. It concluded that China has no legal basis to make claim over the area.

[Peregrine]

Trade war: 'Global jewellers may shift manufacturing base to India from China' - Bloomberg

NEW DELHI: Simmering US-China trade tensions are going to nudge many global jewellery majors to shift their manufacturing base to India from China, according to the chief executive officer of a top diamond financier..

“Some major global players in gems and jewellery are pausing to re-balance the business on account of the trade tensions,” Romesh Sobti, chief executive officer at Mumbai-based IndusInd Bank Ltd, said in an interview. “The natural shift in the manufacturing business will be to India from China.”

The relocation of manufacturing facilities will give a much-needed boost to India’s gem and jewellery exports, which fell about 10% in the three months to June 30. Tighter lending rules and higher borrowing costs in the nation as a fallout of a $2 billion bank fraud last year have worsened the operating environment for the business that contributes 15% of India’s Exports

While a possible shift of manufacturing base by companies looking to deleverage their China strategy is in the offing, there will be hurdles for entry into India, Colin Shah, vice chairman at the Gem & Jewellery Export Promotion Council, said on phone. The South Asian nation is a natural destination for the shift in business from China because of skilled labor and decades of experience in cutting and polishing diamonds.

“Unless there is a favorable tax regime and ease of doing business it would be challenging for the industry to move from China to India,” Shah said. IndusInd is among the top 3 banks financing the global diamond business, according to the council backed by the nation’s government

Cheers

[dinesh_kimar]

In the past two years, there has been more steps to contain China than the preceding 70 years.
The Namo govt has operationalized nuclear ballistic submarines, tested ASATs, launched dedicated military satellites, conducted external surgical strikes on PLA trained guriellas, intruded into non Indian but disputed territory in Doklam, inducted 100s of Tanks, 1000s of ATGMs, 2 kinds of artillery guns, and wrapped up most of the critical strategic roads on the border.

Also, exercises like Gagan Shakti with 1000s of sorties in full tempo operations, and Air Chief's statement of detection of the J-20, close IAF coordination in Doklam ( rapid heavy lift was made available and forward fighter bases activated ), and smartly arm twisting China into forcing Hafiz Saeed as a terrorist, and now the patrolling of Malacca by submarine. Offensive aerial strikes on Pakistani mainland.

The UPA government did not take these simple practical steps for many years.

I was scrolling old Brf posts, and came across this gem by AK Anthony in 2011 letting the enemy get away Scot free "Terrorists wearing Pakistani army uniforms crossed the border and beheaded our boys."

Admiral DK Joshi was thrown out, for want of a locally made submarine battery, possibly AK Anthony wanted to avoid single vendor situation.

Mani Aiyar refused artillery shell, mortar and sniper fire on the LOC. I have seen an article where he says, if Pakistan shoots at you , pls duck. Gen.Hasnain created a Workaround by using L-70 old guns in direct fire mode.

The perennial shortage of eqpt and ammo, not striking back Pakistan after 26/11 and bursting into tears, the Shram-el-Shaik and Siachen sellouts.

Our best NSG commandos going to Taj hotel in a municipal bus.

If these guys were so incompetent and anti national, why were they kept in their positions ? Rahul even had dinner in Chinese embassy.

The dove talked abt all these things in Vivekananda speeches. He even talked abt regaining lost Indian territory and Tibet.

Recently, China has indicated that they want to settle the border dispute with India.

[SSridhar]

Philippine defence chief slams China's doublespeak over sea row - Straits Times

Philippine Defence Secretary Delfin Lorenzana yesterday slammed what he called Beijing's doublespeak, after its top envoy in Manila said China would "not take the first shot" in the South China Sea, even as it expands its military presence in disputed waters.

"So they are saying… they want peace in the South China Sea, blah blah blah. But it does not match what they are doing on the ground," Mr Lorenzana told reporters.

He said he is sceptical each time China claims it does not bully other nations that are claiming parts of the South China Sea.

"It's good (to hear)... Maybe it's meant to keep us calm… But the bottom line is what they're saying does not match what they're doing," he said.

Mr Lorenzana's remarks come as top diplomats, including United States Secretary of State Mike Pompeo, converge in Bangkok this week for a key South-east Asia summit to tackle rising tensions in the South China Sea and the fallout from the US-China trade war.

"The South China Sea will be an important agenda item. They (China) will be seeking to curb any further hardening of stance by the Philippines," Mr Alexander Neill, an expert on Chinese military affairs at the International Institute for Strategic Studies, told Bloomberg.

"They will likely reiterate their sovereignty over the islands and reefs and criticise external interference," he said.

Mr Lorenzana said China's occupation of the Scarborough shoal, just 358km west of the Philippines' main coast, was proof Beijing's intentions had not been benevolent.

"That was bullying," he said.

The US has also described China's more aggressive posture in asserting its claim to vast swathes of the South China Sea as "bullying behaviour".

Mr Lorenzana was responding to China's Ambassador to the Philippines Zhao Jianhua, who said in a speech on Monday to mark the 92nd anniversary of the People's Liberation Army that Beijing "adopts a military strategy of active defence, which adheres to the principle of defence, self-defence and post-strike response".

"We will not take the first shot," Mr Zhao said.

China has been in control of Scarborough since 2012, after a Philippine Navy frigate intercepted eight Chinese fishing boats suspected of poaching coral and giant clams.

A two-month stand-off between the Philippines and China later ensued.

The US eventually mediated a deal. Both sides were told to withdraw from Scarborough.

The Philippines pulled out its ships. But China stayed, and later sealed off the entire atoll.

Last week, Mr Lorenzana complained that Chinese warships had been making unannounced passage through the Philippines' southernmost island en route to the Pacific since February.

"They should inform us that they are passing," he told reporters.

China claims nearly all of the South China Sea, where about US$5 trillion (S$6.85 trillion) sea-borne trade passes annually.

Brunei, Malaysia, the Philippines, Vietnam and Taiwan also have claims on parts of the sea.

China has turned seven reefs it occupied in the southern half of the South China Sea into islands to secure its claims.

Satellite and aerial surveillance has found emplacements for missiles, 3km-long runways, extensive storage facilities, and a range of installations that can track satellites as well as foreign military activity and communications on these islands.

The envoy, Mr Zhao, said in his speech that China "is the last country" that would want freedom of navigation and overflight in the South China Sea curtailed.

Three-fourths of China's trade passes through these waters, including 80 per cent of its oil needs, he said.

[SSridhar]

Another Tienanmen could be on offer !

Chinese army’s Hong Kong chief says troops are ready to protect China’s sovereignty - South China Morning Post

The chief of the Chinese military garrison in Hong Kong has spoken for the first time about the ongoing unrest in the city, warning that violent clashes would not be tolerated and that the army was determined to protect China’s sovereignty.

Chen Daoxiang, the commander of the People’s Liberation Army’s (PLA’s) Hong Kong garrison, made the warning at a reception in Hong Kong celebrating the 92nd anniversary of the Chinese military on Wednesday, when the garrison also released a promotional video that stated that troops stationed in the city were able to protect its long-term stability.

One of the scenes in the video features a soldier shouting in Cantonese during an anti-riot drill: “All consequences are at your own risk.”
Chen’s comments marked the first time he had commented on Hong Kong since protests erupted in early June against the city’s controversial extradition bill. The bill proposed the transfer of suspects to jurisdictions with which Hong Kong has no extradition agreement, including mainland China.

“Recently, there have been a series of violent incidents happening in Hong Kong,” he said at the reception, held at the garrison’s central barracks in Admiralty on Hong Kong Island. “This has damaged the prosperity and stability of the city, and challenged the rule of law and social order.

“The incidents have seriously threatened the life and safety of Hong Kong citizens, and violated the bottom line of ‘one country, two systems’.

“This should not be tolerated and we express our strong condemnation.”

Chen said the garrison resolutely supported Hong Kong’s Chief Executive Carrie Lam Cheng Yuet-ngor and the Hong Kong police in maintaining law and order.

“We resolutely support the action to maintain Hong Kong’s rule of law by the people who love the nation and the city, and we are determined to protect national sovereignty, security, stability and the prosperity of Hong Kong,” he said.

The PLA would adhere to the Basic Law, Hong Kong’s mini-constitution, as well as to the Hong Kong garrison law and the direction of the Central Military Commission, headed by Chinese President Xi Jinping, Chen said.

The Hong Kong garrison released a three-minute video on Wednesday, showing anti-terrorism and anti-riot drills. Tanks are mobilised in some of the drills.

In an anti-riot drill, troops are seen marching with a red warning flag telling rioters to “stop charging, or we use force”.

“All consequences are at your own risk,” a solider yells.

[Peregrine]

China's yuan falls to 2019 low after Trump tariff threat

China's yuan fell on Friday to its lowest level this year against the dollar following United States President Donald Trump's threat of new tariffs on Chinese goods, coming close to breaking the politically sensitive level of seven to the US currency.

The yuan tumbled to 6.9520 to the dollar, its lowest level since December, but recovered slightly by midday.

The currency's weakness is helping to fuel Washington's trade complaints. The US Treasury Department declined in May to label China a currency manipulator but said it was closely watching Beijing.

Trump's tariff hikes in a fight over China's trade surplus and technology ambitions have put downward pressure on the yuan by fuelling fears economic growth might weaken.

Chinese leaders have promised to avoid “competitive devaluation” to boost exports by making them less expensive abroad. But regulators are trying to make the state-controlled exchange rate more responsive to market forces, which are pushing the yuan lower.

The level of seven yuan to the dollar has no economic significance, but could revive US attention to the exchange rate.

“The Chinese yuan can push above its 6.85-6.90 range towards 7,” said Philip Wee and Eugene Leow of DBS Group in a report. “The latest tariff threat will add to China slowdown worries, which markets believe can only be assuaged by a trade deal.”

The yuan, also known as the renminbi, or “people's money,” has lost 4 per cent since hitting a high in February of 6.6862 to the dollar.

That helps exporters cope with tariffs of up to 25pc imposed by Trump on billions of dollars of Chinese goods. But it raises the risk of inflaming American complaints.

Trump rattled financial markets on Thursday by announcing plans for 10pc tariffs on $300 billion of Chinese goods, effective Sept 1. That would extend penalty duties to almost all US imports from China.

“The new tariff escalation will likely put more depreciation pressure on the CNY,” said Tao Wang of UBS in a report.

Still, she said Beijing is likely to “tightly manage” the exchange rate “to avoid any significant depreciation". China's central bank sets the yuan's exchange rate each morning and allows it to fluctuate by 2pc against the dollar during the day. The central bank can buy or sell currency or order Chinese commercial banks to do so to dampen price movements.

The Treasury report in May said US authorities believe direct central bank intervention this year “has been limited". However, it urged Beijing to “take the necessary steps to avoid a persistently weak currency".

China is, along with Germany, Japan and South Korea, on a list of trading partners that “merit close attention to their currency practices”, the report said.

A weaker yuan also might disrupt Chinese efforts to shore up weakening economic growth by encouraging an outflow of capital from the world's second-largest economy. That would raise borrowing costs.

The central bank tried to discourage speculation last August by imposing a requirement that traders post deposits for contracts to buy or sell yuan. That allows trading to continue but raises the cost.

Beijing imposed similar controls in October 2015 after a change in the exchange rate mechanism prompted markets to bet the yuan would fall. The currency temporarily steadied but fell the following year.

The People's Bank of China is unlikely to weaken the yuan intentionally “because Beijing will not want to inadvertently jeopardize macro and capital market stability”, said Vishnu Varathan of Mizuho Bank in a report.

Cheers

[SSridhar]

Beijing says progress on China-Australia ties 'unsatisfactory' - Straits Times

The progress of repairing China-Australia ties, strained over Canberra's concerns about Chinese influence in its domestic affairs, has been"unsatisfactory," said China's top diplomat after meeting his Australian counterpart Marise Payne.

"During our diplomatic and strategic dialogue in Beijing last November, we agreed to calibrate and relaunch China-Australia relations, but the process of improving our ties has not been satisfactory," said State Councillor Wang Yi after the Bangkok meeting on the sidelines of a regional security forum.

Beijing says it never interferes in the internal affairs of another country.

Mr Wang said he hoped China's relations with Australia could be back on track as soon as possible, according to a statement from the Chinese foreign ministry.

Both countries have no historical grievances and fundamental conflicts of interests and their interests are highly complementary, said Mr Wang.

China is Australia's major trading partner and while there are difficulties in bilateral ties, Australia is willing to strengthen dialogue and communication with China on the basis of mutual respect, the statement cited Ms Payne as saying.

Australia has banned Chinese telecommunications equipment-maker Huawei from supplying its 5G mobile networks over security concerns and is seeking to counter China's emerging influence in the South Pacific islands.

Australia will make its own decisions and won't discriminate against any particular country or company, Ms Payne was quoted as saying in regard to the Huawei issue.

[SSridhar]

Darwin, Australia at centre of strategic tussle between US and China - South China Morning Post

The United States’ US$211.5 million plan to expand its military infrastructure in Australia reflects the nation’s growing strategic importance amid increasing rivalry between the US and China, according to analysts.

The assessment came after Australian Foreign Minister Marise Payne on Tuesday said the US planned to build an additional military facility in Darwin, capital of the Northern Territory, once it gets approved by the US Congress.

Payne did not give details of the new infrastructure, but according to earlier Australian media reports, the US plans to build a port facility that could accommodate large amphibious warships such as Australia’s landing helicopter docks and American vessels such as the USS Wasp, strengthening the US military presence in the country.

The move would also be a direct hedge against Chinese influence in Darwin, whose port was leased to Chinese company Landbridge Group
in 2015 under a controversial 99-year deal.

Under the agreement, Landbridge – controlled by Chinese billionaire Ye Cheng, who is based in Shandong province – took an 80 per cent stake in the port. The company also owns oil and gas assets in Australia.

At the time, Washington complained that it had not been informed about the deal in Darwin, which is of strategic importance to both the US and its biggest rival, China.

A month after the port lease was granted in October 2015, Ye told state news agency Xinhua that Beijing wanted to put Darwin on the map for Chinese business under its Belt and Road Initiative – a vast trade and infrastructure scheme linking China with Asia, Africa, Europe and beyond.

Canberra has not signed a memorandum of understanding on the programme amid concerns over Beijing’s regional ambitions, but the state of Victoria has broken ranks with the national government to support the initiative.

Adam Ni, a China researcher at Macquarie University in Sydney, said Darwin was a base for US marines and important for its operations in the Pacific.

“It fits into a bigger strategy of tighter coordination with its allies in response to China,” Ni said.

“Darwin also provides a good base for US operations from Australia such as rotating its marines, deploying military assets in the context of wider networks to enhance its military presence in Asia … It’s a piece of the puzzle,” he said.

“For China, it’s more about investment – and the access to infrastructure assets, such as ports ... as part of expanding networks for its trade connectivity. It’s an infrastructure gateway to Australia,” he added.

Wang Heng, an associate law professor at the University of New South Wales in Sydney, said Darwin Port was significant to Australia’s national security.

“Investment in this critical infrastructure could have long-term and profound implications given the role of such infrastructure,” Wang said.

The US move comes as Washington tries to win support for its Indo-Pacific strategy, a military and economic framework to contain China’s expansion in the Pacific and Indian oceans. It was formally laid out by US President Donald Trump during his first Asian tour in 2017, when he also revived the Quadrilateral Security Dialogue – informal strategic talks between the US, Japan, Australia and India.

Liang Yunxiang, an international affairs expert at Peking University, said the close security ties between Australia and the US could add to scrutiny on Chinese investments in the country.

“This latest US move has targeted China to a certain degree, but since China won’t stop investing in overseas ports [as it seeks to] expand economic and security interests, China’s cooperation with other countries is likely to run into more trouble because of US pressure,” Liang said.

It comes amid increasing concern over growing Chinese influence in Australia and the region, as well as allegations of Chinese meddling in Australian politics that have strained ties between the two countries.

After meeting his Australian counterpart Payne at a regional summit in Bangkok on Friday, Chinese Foreign Minister Wang Yi said the countries had not made “satisfactory” progress to improve relations {See the earlier post} .

Meanwhile, Canberra recently set up a US$1.38 billion Australian Infrastructure Financing Facility for projects in the Pacific, and it has also been proposed that the country’s Export Finance and Insurance Corporation be granted more resources and power to support investment in the region – including through a new Trilateral Infrastructure Partnership between Australia, the US and Japan – to curb China’s influence in domestic affairs.

China’s military expansion in the region is also a concern for Australia, and the US. The Pentagon noted that China “will remain the largest spender in the Indo-Pacific region besides the United States” in an annual report to Congress in May.

“The PLA Navy also continued submarine deployments to the Indian Ocean, demonstrating its increasing familiarity with operating in that region and underscoring China’s interest in protecting [sea lines of communication] beyond the South China Sea,” the report said.

[SSridhar]

RCEP negotiations: India lists out demands before China for market access - Amiti Sen, Business Line

Playing hardball with China in the on-going negotiations for the Regional Comprehensive Economic Partnership (RCEP) pact, India has read it out a big list of demands for market access in both goods and services, including larger exports of drugs, sugar, rice, dairy, soybean, IT and other services.

In a meeting between China’s Vice Minister of Commerce Wang Shouwen and India’s Commerce Secretary Anup Wadhawan on the sidelines of the on-going RCEP Ministerial meet in Beijing, New Delhi pointed out that a RCEP deal will be acceptable to the country only if it addresses the existing level of trade imbalance, a government official told BusinessLine.

“A firm decision has been taken by the Indian government that for the country to enter into an RCEP agreement offering market access to China, among the other fifteen member countries, it is imperative that all its demands in goods and services are met by Beijing. Otherwise, given the almost $60 billion trade imbalance and the resistance from the Indian industry, it would be difficult for India to accede to the RCEP,” the official said.

Trade and investment deal

Most countries in the sixteen-member grouping, which comprises the ten ASEAN countries, China, India, South Korea, Japan, Australia and New Zealand, who are attending the Ministerial meet, are hoping to make official the tentative November-end deadline for concluding the trade and investment deal. But New Delhi, has held the position that it does not want to be hurried into a bad deal.

In fact, Indian negotiators have now started indicating that they may say no to a pact if they do not get what they are seeking not just in goods, but also in services where offers have been “disappointing”.

Wadhawan, in his meeting with the Chinese, demanded larger exports of products like pharmaceuticals, sugar and rice from India and also used the opportunity to push for some of the market access related to items such as milk and milk products, pomegranate, soyabean meal and okra. “He also used the opportunity to flag issues pertaining to Indian service sector including IT and ITeS and issues pertaining to easing business visas by China to Indian business travellers,” the official said.

The RCEP Ministers are expected to shortly issue a `media statement’ after the conclusion of their two-day meeting. The RCEP countries together constitute more than a third of the world’s GDP, almost half of its population and 30 per cent of global trade.

[uskumar]

Fact that rcep negotiations is not going well was evident when Piyush Goyal skipped the meeting.
Piyush Goyal to skip RCEP trade pact meeting as fear of China mounts

[SSridhar]

China will not ‘stand idly by’ if US proceeds with Asian missile plans - South China Morning Post

US plans to deploy intermediate-range missiles in the Indo-Pacific region would be met with Chinese countermeasures, according to a senior foreign ministry official on Tuesday.

Fu Cong, director of the ministry’s arms control department, said China was particularly concerned about the plans, announced by US Secretary of Defence Mark Esper at the weekend, to develop and test a land-based intermediate-range ground based missile in the Asia-Pacific “sooner rather than later”.

Fu’s remarks followed last week’s withdrawal by the US from the Intermediate-Range Nuclear Forces Treaty (IRNF) which, he said, would have a “direct negative impact” on global strategic stability, as well as security in Europe and the Asia-Pacific region.

The US withdrawal was swiftly followed by Esper’s assertion, at the start of a week-long tour of Asia, that he wanted to deploy mid-range conventional missiles in the Asia-Pacific within months. Australia previously said the locations for the bases were not yet known, but it would not be one of them.

Esper also confirmed that Washington wanted to deploy new intermediate-range missiles in Asia, something it would not have been able to do under the terms of the IRNF, signed by Russia and the US in 1987. It expired on Friday, with Washington saying it withdrew because of Russia’s alleged violations of the pact. Russia denies breaching the terms.

“China will not stand idly by and will be forced to take countermeasures should the US deploy intermediate-range ground-based missiles in this part of the world,” Fu told reporters at a specially called briefing.

He also advised other nations, particularly South Korea, Japan and Australia, to “exercise prudence” and not allow the US to deploy such weapons on their territory, saying that would “not serve the national security interests of these countries.”

Fu said China had no intention of joining nuclear weapons reduction talks with the US and Russia, pointing to the huge gap in the size of China’s arsenal compared to those of the other two. China has an estimated 290 nuclear warheads, compared to 1,600 for Russia and 1,750 for the US, according to the Federation of American Scientists.

Russian President Vladimir Putin has called for urgent arms control talks to prevent a chaotic arms race following the treaty’s demise. He also said on Monday that Russia would only deploy new intermediate-range missiles if the US does.

China has already shown “maximum restraint” in developing its arsenal and stuck to its policy that it would not be the first to use a nuclear weapon in a conflict, Fu said.

“I don’t think it is reasonable or even fair to expect China to participate in an arms reduction negotiation at this stage,” he said, but added that China remained committed to multilateral efforts to reduce nuclear stockpiles such as the UN’s Comprehensive Nuclear-Test-Ban Treaty, although it had yet to ratify that agreement.

Fu would not elaborate on what countermeasures China was considering taking against the US, saying only that “everything is on the table”. He did say China had never – and would never – take part in a nuclear arms race.

Nor would he say how China might retaliate against countries that hosted US land-based intermediate-range missiles, although China has in the past used economic means to retaliate against South Korea over its deployment of the US anti-missile defence system known as THAAD.

Fu dismissed US arguments for leaving the INF as “pure pretext”, saying Washington was merely looking for an excuse to develop new weapons. If the US truly believed Russia was cheating on the treaty, he said, than the way forward was to negotiate rather than withdraw.

Meanwhile, Washington’s argument that it was threatened by China because 80 per cent or more of Chinese missiles fell into the intermediate-range category did not hold up, since those missiles would be unable to reach the continental US, Fu said.

“So the US would be the least to worry if that was the case. That shows that all of this is nothing but a pretext.”

There are rising doubts about whether the US and Russia will extend an agreement on long-range nuclear weapons, scheduled to expire in 2021, known as New START. US President Donald Trump said he had been discussing a new agreement to reduce nuclear weapons with China and Russia.

“And I will tell you China was very, very excited about talking about it and so was Russia”, Trump told reporters. “So I think we’ll have a deal at some point.”

Asked about Trump’s comments, Fu said he did not wish to contradict Trump, but repeated that China had “no interest and, frankly, we don’t think we are even in a position to participate in a trilateral negotiation aimed at a nuclear arms reduction”.