カテゴリー: News

U.S. Secretary of Defense Ash Carter in Hawaii ( SOD via flickr)

                             by David Parmer

For the second time in less than a week, a high U.S. government official has sent a blunt message to China about U.S. intentions in the Pacific. On May 27, at a change-of-command ceremony at Pearl Harbor, Hawaii,  U.S. Secretary of Defense Ash Carter echoed the same kind of tough talk that U.S. Vice President Joe Biden had engaged in less than a week earlier at the U.S. Naval Academy.

 Carter’s speech echoed Biden’s in that he addressed the occasion at hand, congratulated the admirals involved, talked of their service and achievements, and then gave the same message/warning to China that Biden had done. He said that the U.S wants peaceful resolution to all disputes, but that it would not budge on what it considers its rights in international waters.

 First, we want a peaceful resolution of all disputes, and an immediate and lasting halt to land reclamation by any claimant. We also oppose any further militarization of disputed features.

Second – and there should be no mistake, should be no mistake about this – the United States will fly, sail, and operate wherever international law allows, as we do all around the world.

Finally, with its actions in the South China Sea, China is out of step with both international norms that underscore the Asia-Pacific’s security architecture, and the regional consensus in favor of a non-coercive approach to this and other long-standing disputes.

China’s actions are bringing countries in the region together in new ways. And they’re increasing demand for American engagement in the Asia-Pacific, and we’re going to meet it. We will remain the principal security power in the Asia-Pacific for decades to come.

 To underscore the points he outlined in Hawaii, Secretary of Defense Carter repeated them and elaborated on the theme in his speech at the IISS Shangra La Dialogue in Singapore on May 30. One might ask why the Obama administration is having two of its highest level officials delivering the same message. One reason might simply be to clearly state U.S. resolve to the American people, and to U.S. allies in the Pacific region. The other is to show U.S. resolve to a rising China, and put China on notice that the U.S. is still very much a world power and player in the Pacific. A final reason that can always be considered is domestic politics. A strong policy in the Pacific and a tough stance toward China might pre-empt any attempt by Republicans to paint the Democrats as “weak” on China in the coming presidential election.

 Secretary Ash Carter’s Hawaii Speech May 27, 2015

http://www.defense.gov/Speeches/Speech.aspx?SpeechID=1944

Secretary  Ash Carter’s Singapore Speech May 30, 2015

https://www.iiss.org/-/media/Documents/Events/Shangri-La%20Dialogue/SLD15/Carter.pdf

Chinese Response to Carter at Annapolis

http://news.xinhuanet.com/english/2015-05/29/c_134282034.htm

 

 

 

 

 

 

 

 

                            Nursultan Nazarbayev, President of the Republic of Kazakhstan (Photo: RIA Novosty)

                            by David Parmer

If all goes well, the beginning of the 21st century will be remembered as the beginning of the rise of Kazakhstan to world power. Kazakhstan could easily become another Singapore; it has many of the same elements that worked in favor of making that country a world-class success including an extremely favorable location, political stability and a multi-ethnic society.

 And now, history seems to favor this Central Asian country. China has proposed a New Silk Road and has allocated funds for its promotion. New rail traffic will flow through Kazakhstan making it the crossroads of the resurgence of the region.

Moreover, where Singapore is blessed by its location, Kazakhstan, in addition to location, is blessed with petrochemical and mineral wealth.  The world’s ninth largest country is also blessed with abundant nature. It has rivers, mountains  and plains of breathtaking beauty that are an incredible asset for its tourism industry.  Kazakhstan will host Expo 2017 with the theme “Future Energy” and welcome visitors from around the world. As for political stability, Kazakhstan’s President, Nursultan Nazarbayev has just been re-elected for a fifth term, so politically one can expect “business as usual.”

                         Almaty Oblast Kazakhstan (aboutkazakhstan.com)

 

The plus side of the equation looks pretty good, but what about the minus side? There are several issues that confront Kazakhstan in this century.

The  U. S. government lists some of them as:

• National identity
• Islamic revival
• Expanding resources and exporting
• Political and social reform

 Of these, perhaps the first two are the most salient. The country has a slightly higher percentage of Kazaks to Russians, the two main ethnic groups in the country.

The challenges for the 21st century are avoiding the dangers of Russian nationalism and separatism and Islamic extremism. Kazakhstan has only been independent since 1991, a very short time on the calendar of history. Can the people of Kazakhstan forge a national identity that supersedes ethnic and religious differences?

With a strong national identity, Kazakhstan can withstand the give and take of national politics and remain united, and at the same time enjoy its good fortune in terms of resources and geographical location. Kazakhstan is indeed at a crossroads, and time will tell which road it takes into this century and beyond.

                                    Astana, Kazakhstan by Night ( Photo: aboutkazakhstan.com)

 

 

    Xi Jinping The Governance of China (Photo: english.cri.cn)

                           by David Parmer

The  unambiguous answer to the above questions can be found in Mr. Xi’s book, The Governance of China. Released in September 2014, the book’s 18 chapters contain speeches, interviews and correspondence by China’s president, who also holds the posts of General Secretary of the CCP and Chairman of the Central Military Commission.

 Since the 18th National Congress of the Communist Party of China, China has headed in a new direction in Reform and Opening Up. President Xi tells us what he is thinking and where he is going in light of these developments.

Topics covered by Mr. Xi include:

• Socialism with Chinese Characteristics
• The Chinese Dream
• All-round and Deeper-level Reform
• Economic Development
• Rule of Law
• Culturally Advanced China
• Social Undertakings
• Ecological Progress
• National Defense
• “One Country, Two Systems”
• Peaceful Development
• New Model of Major-Country Relations
• Neighborhood Diplomacy
• Cooperation with Developing Countries
• Multilateral Relations
• Close Ties with the People
• Combat Corruption
• The CPC Leadership

The immense value of Mr. Xi’s book is that he spells out the Chinese position in a succinct and easily-understandable manner. Pick a topic and you will find China’s position and Mr. Xi’s thinking stated clearly:

 On Taiwan:

 “…the most important and most fundamental thing to do is to maintain China’s sovereignty and territorial integrity. Although the mainland and Taiwan are yet to be reunited, they belong to one and the same China which is an indivisible whole.” (Handle Cross-Straits Relations in the Overall Interests of the Chinese Nation)

 On The Chinese Dream:

“In my opinion, achieving the rejuvenation of the Chinese nation has been the greatest dream of the Chinese people since the advent of modern times.” (Achieving Rejuvenation Is the Dream of the Chinese People)

On the Environment:

 “Our Party raised a requirement to build a beautiful China at its 18th National Congress. The whole of society should enhance its ecological awareness and strengthen environmental protection in accordance with this requirement so as to build China into a country with a good environment.” ( A Better Environment for a Beautiful China)

On the Military:

 “Our officers and soldiers will maintain an indomitable revolutionary sprit and be dauntless in combat. We will make every effort to combat corruption and promote integrity in the armed forces. Senior officers must take a clear-cut stand against corruption and set an example in abiding by the code of honest conduct.” (Build up Our National Defense and Armed Forces)

 Those interested in understanding China in the 21st century will find The Governance of China a readable and easily-understandable roadmap. One may agree or disagree with the direction  in which China is heading, but one can not claim ignorance when it is all there in Xi Jinping’s book, The Governance of China.

Sichuan’s Min River is the largest and longest of the Yangtze tributaries: it flows 735 km before it joins the mighty Yangtze at Yibin. (Photo: Wikimedia)

                                     by David Parmer

These days a whole series of dams are being built along the Min River to feed China’s incessant hunger for power, to prevent floods and to provide irrigation for agriculture. But long before these dams were even a dream, there was one engineering project that has stood the test of time and still serves the people of Sichuan, and that is the Dujiangyan Irrigation System.

 The Dujiangyan Irrigation System is the oldest no-dam irrigation system in the world. It was built during the Qin dynasty in 256BC by the  provincial governor and engineer whose name has come down to us through history: Li Bing. Governor Li saw the dangers of flooding and the need for irrigation and began to plan an ingenious three-part irrigation system to tame the waters and provide the needed flow for irrigation. The tunnel through Mt. Yulei to the Sichuan plain took eight years to complete. Li Bing’s engineering feat not only prevented floods but also greatly contributed to the long term prosperity of the region.

 In 2000, the Dujiangyan Irrigation System and adjacent Taoist sites on Mount Qingcheng were declared  UNESCO World Heritage sites. Dujiangyan and Mt. Qingcheng are about 60km northwest of Chegndu and accessible by train and bus.

 

 

                              (Illustration: China Discovery)

UNESCO World Heritage Site

http://whc.unesco.org/en/list/1001

                                                  Teheran Grand Bazar (Wikimedia)

Last week’s (April 2, 2015) framework deal between the P5+1 nations (U.S., U.K., France, Russia, China + Germany) and Iran paves the way for Iran’s re-emergence into the world economy. Should a long-term agreement be made early next summer there would be the gradual lifting of international sanctions, particularly in banking, which would potentially energize and enrich Iran’s listless economy.

But would an influx of capital and free exports create major economic growth and prosperity for the country?

 While Iran has a vibrant private sector, in many ways it can be compared to China in the late 1970s prior to Reform and Opening Up. To begin with the state is very much in the economy, and many industries have yet to be privatized. Secondly, much like China’s People’s Liberation Army, Iran’s Islamic Revolutionary Guard Corps has its hands in a number of industries across the economy. To further complicate things, there are the Bonyad, or charitable trusts, which likewise are in all types of businesses, and are repeatedly criticized as bloated and inefficient.

With such a quagmire of economic retardants in place, would even a total lifting of sanctions and the influx of capital create a new golden age for Iran’s economy?

 On the plus side, Iran has a lot going for it. Number one is a young population. Estimates suggest that up to two-thirds of the population is under 30. ( Currently unemployment is high, and these young people who could drive a vibrant economy are going abroad creating a “brain drain” within Iran.) Iran has huge oil and gas reserves as well as the world’s second largest store of copper. Iran also has a substantial auto making industry and has the largest mobile phone market in the Middle East.

 The potential for a re-invigorated Iran is an attractive proposition. Iran’s self-interest could be aligned with that of its regional neighbors and world partners.

Critics hold that the new Iran would not necessarily be politically different.

One of the problems in the West is the habit of seeing Iran as a monolith, just as “Red China” was seen as a monolith in the 1960s.  The Wall Street Journal points out in an April 3 article that those in Iran making the nuclear deal in Switzerland are different from those making regional politics.

 So for Iran, will prosperity come soon, and how will prosperity look? These are the big questions. Will prosperity empower Iran’s young population and create a new political climate? Will Iran take the China road? Or will this chance be lost?  For the sake of the people in Iran, the region and the world, we hope not.

 

http://www.wsj.com/articles/prospect-of-bolder-iran-unnerves-some-encourages-others-1428084595

                                    

                               by David Parmer

Jim Rogers is an American investor, author and financial commentator and world traveller whose thoughts and opinions have regularly appeared in the Washington Post, N.Y. Times, Forbes, Fortune, and the Wall Street Journal. His net worth is said to be $300 million. He is Chairman of Rogers Holdings and Breeland Interests Inc., and founder of the Rogers International Commodities Index.

Rogers was born in 1942 and grew up in Alabama. He attended Yale and Oxford, then worked briefly on Wall Street, where he founded the very successful Quantum Fund with international financier George Soros. (Quantum is said to be the most profitable hedge fund in history). At age 37, Rogers “retired” and moved on to other things including becoming a professor at Columbia University School of Business and hosting a TV show.

From 1990 to 1992 Rogers traveled the world by motorcycle logging 100,000 miles. In 1999 he again took a world tour by road, this time with his wife, visiting 116 countries. He has written a number of books including,

• A Bull In China
• Street Smarts
• Adventure Capitalist
• Hot Commodities
• Investment Biker
• A Gift To My Children

 In 2007 Rogers took has family and moved to Singapore where they now live. He has given two reasons for this. First he believes that the future lies in Asia, particularly China, and secondly in order to give his two daughters the best education possible (in the Singapore school system) and to have them become fluent speakers of Mandarin Chinese.

There are  investment opportunities in Myanmar, Russia, and even North Korea as well as China according to Rogers. He is not enthusiastic about India, although in a recent interview with Indian media he said he hoped that Prime Minister Modi could make the necessary reforms to deal with the Indian economy including dealing with an entrenched bureaucracy. Rogers is a frequent guest and commentator on a variety of media. He is very much at ease, always charming, often insightful and never dull.

 Here are some of his thoughts on a number of subjects:

“China is the next great country in the world.” ( J.R. Daily Ticker 13 May 2014)

“China is going to be the most important country in the 21st century whether we like it or not.” (J.R. Sophie Co. Rt.com 26 May 2014)

“China will have plenty of setbacks along the way as does every country, company, family and individual that rises.” ( J.R. Business Insider 17 Feb. 2014)

 “The most sensible skill that I can give anybody born in 2003 is a perfect command of Mandarin.” (J.R. Business Insider 26 Dec. 2011)

 “My top three currencies are the U.S. Dollar, the Chinese Renminbi and the Hong Kong Dollar.” (J.R.  Jim Rogers Talks Markets 27 March 2015)

 

 

                 Oct. 2014 – 21 Asian countries sign on to AIIB   (Photo: People’s Daily)

The deadline for joining the Asian Infrastructure Investment Bank (AIIB) as a founding member is March 31, 2015 . Now, in late March 2015, despite U.S. opposition to the bank, it seems everyone is on board: 22 Asian nations, the Europeans  (UK, France, Germany Italy) and even Australia. Only South Korea and Canada are still on the fence.

 The bank is a done deal, and most observers believe the U.S. made a big mistake by opposing the AIIB, and that it made that mistake very publicly. The U.S. had its reasons for its opposition: it was concerned whether the bank world maintain high standards, be transparent and observe environmental and social safeguards.

The U.S. asked its friends and allies to take a “wait and see” attitude concerning the above points before joining the bank.

 The U.S. has strong influence in the World Bank, the International Monetary Fund, and the Asian Development Bank. Some observers believed that with the AIIB, China would not only get to set the agenda, but also use the bank as a tool of “soft power.”

U.S. friends and allies contended that by joining the bank their very presence will ensure that China runs the bank according to international standards, and will not be able to use it as a tool for its geopolitical agenda.

 One fact that often gets overlooked in this discussion is that there is a real need for funds for Asian infrastructure development.  Estimates of capital needed between 2010-2020 by the Asian Development Bank run to $776 billion. With the present institutions in place, there is a real shortfall of development capital.  Hence the AIIB is a good thing for the region and its growing economies. China’s CCTV ran a story on March 19 with the headline: “China-proposed AIIB is a gift to the world.” The piece ended with the writer suggesting that the U.S. get on board and lend its expertise to the project.

And already it looks like the U.S. is doing damage control. A Wall Street Journal article dated March 22 reports that the U.S. is now holding talks with the Chinese about possible cooperation with the new bank. It seems unlikely that the U.S. will join the AIIB, but cooperation might be another matter.

One thing that can be taken away from this story is the rising arc of Chinese power and influence and the waning arc of post-war U.S. power that has been ascendant and supreme for the past 70 years. In the realm of history, the story of the Asian Infrastructure Investment Bank will be like a few raindrops on the ocean-maybe a footnote at best.  But what has happened this spring of 2015 around the issue is a major shift. The friends and allies of the U.S. decided to go their own way, publicly and without remorse. And once done, they will do again. This may be the point when history says the post-war period was finally over.

 Turkish Weekly Article on AIIB

http://www.turkishweekly.net/news/182018/china-led-aiib-attracts-more-and-more-european-members.html 

CCTV Article on AIIB

http://english.cntv.cn/2015/03/19/ARTI1426756432464213.shtml

Wall Street Journal Article on Cooperation With AIIB

http://www.wsj.com/articles/u-s-to-seek-collaboration-with-china-led-asian-infrastructure-investment-bank-1427057486

Asia Society China File: What Went Wrong With U.S. Strategy

http://www.chinafile.com/conversation/what-went-wrong-us-strategy-chinas-new-bank-and-what-should-washington-do-now

 

 

 

 

 

 

 

 

 

 

                                      by David Parmer / Tokyo

 Throughout his career Joe Biden has been seen as the straight-talking Average Joe, the man of the people. (For years he took an ordinary Amtrak commuter train from his home in Delaware to his office in Washington.) Senator Biden and now Vice President Biden has often spoken his mind bluntly and frankly, and even mis-spoken. The gregarious Biden is often taken to task for his gaffes and faux pas, causing some to regard him solely as a very likeable Uncle Joe. But style is not the only thing Biden brings to the table. He has wide and varied political and international experience and personal relationships with leaders around the world.

 Joe Biden was born on November 20, 1942 at Scranton, in the heart of Pennsylvania’s coal country. In 1955 his family moved to the state of Delaware. He attended the University of Delaware and then went on to obtain a law degree at the University of Syracuse. After setting up a law office in Delaware and working in local politics he ran for the senate from Delaware and won against his Republican opponent. The 29-year-old Biden was one of the youngest senators in U.S. history. He worked on several powerful senate committees including the Foreign Relations Committee and the Senate Judiciary Committee. During his career Senator Biden worked on a variety of important issues including the Strategic Arms Limitation Treaty with Russia, the admission of new NATO partners. With his wide experience he was early on considered a foreign policy expert.

In 1987 Senator Biden entered the race for president, but withdrew after a poor showing at the polls. In 2007, he again made another run for president with similar results. Then Senator Barack Obama asked him to be his running mate, and in 2008 Obama defeated Senator John McCain and was elected president. In 2010 Vice President worked on the New Strategic Arms Reduction Treaty with Russia. In 2012 President Obama and Vice President Biden were re-elected for another 4-year term.

During his time as Vice President Biden has not only advised the president, but used his immense experience and relationships in the Senate to further the Obama agenda. Now, as the Obama presidency winds down, the question is will Joe Biden make a third run at being president?

As of March 2015, he has not said “No.” But neither has he said that he is in the race. For the Democrats it depends whether former Secretary of State Hillary Clinton will run or not. It appears that if she does then Biden will stay out of the race. But if she doesn’t run, then we might see Joe Biden run for a third time, and maybe just make it this time. Biden has a solid record and experience that not many can match. On the minus side is his age: he is about the same age as Ronald Regan was when he was president. And his straight speaking style might be used against him in the cut and thrust of partisan politics. In a New Yorker piece on Joe Biden by Evan Osnos, President Obama wonders if either Hillary Clinton or Joe Biden want to put themselves through another presidential campaign. At this point the Average Joe is not saying, but it is clear that he and others are watching and waiting as the clock ticks down to 2016.

 Biden Biography White House:

https://www.whitehouse.gov/administration/vice-president-biden

 New Yorker Article: The Biden Agenda

http://www.newyorker.com/magazine/2014/07/28/biden-agenda

Vice President Joe Biden and President Barack Obama (Photo: White House.gov)

 

                                                            (Photo: Hong Kong Gov.)

In June 2014 an unofficial poll was taken in Hong Kong on universal suffrage by non-governmental political groups.The BBC reported that about 20% of registered voters took part.The question of universal suffrage was raised, and this is directly linked with how the Hong Kong chief executive should be elected. The question of the election of the Chief Executive and universal suffrage are covered in Article 45 of the Basic Law.

Article 45

The Chief Executive of the Hong Kong Special Administrative Region shall be selected by election or through consultations held locally and be appointed by the Central People’s Government.

The method for selecting the Chief Executive shall be specified in the light of the actual situation in the Hong Kong Special Administrative Region and in accordance with the principle of gradual and orderly progress. The ultimate aim is the selection of the Chief Executive by universal suffrage upon nomination by a broadly representative nominating committee in accordance with democratic procedures.

 But “the devil is in the details” and there is a fundamental disagreement between independent political groups, pro-Beijing groups and the Hong Kong government. The disagreement has to do mainly with the nominating process for Chief Executive.Those against the government position want universal suffrage and direct nomination of the Chief Executive.

The National People’s Congress (NPC) stated its position on the issue on August 31, 2014. The document advocated universal suffrage for the 2017 election and held that the nominating committee should decided on 2-3 candidates to be chosen by popular vote.(Link to document below)  As of March 2015 this position has not changed.  At the same time a referendum on this issue has been proposed by the opposition but vetoed by the Hong Kong government.

In the lead-up to the 2017 election, it looks as if the Beijing government, NPC and Hong Kong government will not budge on this issue. Nor are the various opposition groups likely to give up their demands. It is hard to tell now whether mass protests similar to last year’s Occupy Central will take place once schools are on summer holiday, or if more organized anti-demonstration activities will occur. Whatever the case, this issue will remain clearly in focus for the rest of this year and into next year.

The Basic Law, Full Text:

http://www.basiclaw.gov.hk/en/basiclawtext/

NPC on Hong Kong Basic Law, August 31, 2014:

http://news.xinhuanet.com/english/china/2014-08/31/c_133609238.htm