Wandering China

An East/West pulse of China's fourth rise from down under.

Mao promoted perpetual struggle, Deng saved China from Chaos [Forbes] #RisingChina #Leadership #LeeKuanYew

Coming to the age of 90 this year, Lee Kuan Yew recollects the leadership change that kept China from falling apart – and to great effect.

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Mao promoted perpetual struggle, Deng saved China from Chaos
By Lee Kuan Yew
Source – Forbes Asia print edition, published July edition, 2013

this is a scan of the article, please click to expand. Source – Forbes, July 2013

Filed under: Beijing Consensus, Chinese Model, Culture, Deng Xiaoping, Domestic Growth, Economics, Forbes, Government & Policy, Ideology, Influence, International Relations, Maoism, Mapping Feelings, Modernisation, New Leadership, Peaceful Development, Politics, Public Diplomacy, Reform, Strategy, Tao Guang Yang Hui (韬光养晦), The Chinese Identity

China Threat? Former French Diplomat Says No [Forbes] #RisingChina #PeacefulDevelopment

Adding empathy to the eye of the beholder: a gap in the China Threat perception.

In trying to grasp the motives of a more assertive China in territorial disputes such as the South China Sea, Vairon suggests the U.S. try putting itself in China’s shoes for a moment. He posits a situation where China stations its navy in the Gulf of Mexico or the Caribbean’s due to disquietude with the U.S.-Cuban relations.

Also see –
A Q&A with Lionel Vairon, author of “China Threat?” (CN Books)
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China Threat? Former French Diplomat Says No
By Heng Shao, Forbes Staff
Source – Forbes, published July 29, 2013

Is China a threat? Not by nature, but perhaps by reaction, said former French diplomat Lionel Vairon at the launch of the English version of his book, “China Threat?” last Thursday at the Council on Foreign Relations in New York. He believes that the fear of a rising China results from the inability of Western countries to recognize China’s legitimate national interests. China will become problematic only if dominant powers attempt to contain it and deny its place in the international society.


Former French Diplomat Lionel Vairon (Second To Right) At The Launch of “China Threat?”

Vairon, who worked as a diplomat for 16 years in Asia, Africa and the Middle East for the French government and now runs a strategic consulting firm in China, traces the fear of China to a Western mentality still fixated on the Cold War era. Whereas hegemony of super powers was the norm of the past, the current philosophy of international relations should adapt to a “multi-polar system without any major power,” Vairon argues.

“It’s important for us to understand that the colonial time and the imperial time is over,” says Vairon. “Now we’re not talking about new super powers, China will be No.1, No.2.” Rather, China is more concerned with defending its own national interests than becoming the next overlord.

In trying to grasp the motives of a more assertive China in territorial disputes such as the South China Sea, Vairon suggests the U.S. try putting itself in China’s shoes for a moment. He posits a situation where China stations its navy in the Gulf of Mexico or the Caribbean’s due to disquietude with the U.S.-Cuban relations.

“I wonder how [America] would react in the region.” Vairon says. “The U.S. [needs to] recognize that China has vital interests in its neighborhood, which doesn’t mean controlling or invading…It just means ‘we don’t you to be on our borders.’ ”

“We are threatened, so are the Chinese,” Vairon adds.

Please click here to read the entire article at Forbes.

Read the rest of this entry »

Filed under: Beijing Consensus, Charm Offensive, Chinese Model, Communications, Culture, Forbes, Government & Policy, Hard Power, Influence, International Relations, Mapping Feelings, Media, Modernisation, Peaceful Development, Public Diplomacy, Soft Power, Strategy, Tao Guang Yang Hui (韬光养晦), Territorial Disputes, The Chinese Identity, The construction of Chinese and Non-Chinese identities, U.S.

China’s ‘String of Pearls’ – Real or Fake? #Forbes #China #India #Pakistan

China’s ‘String of Pearls’ not a figment of journalists’ imaginations: Maha Atal on seeing the economic forest for the trees.

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China’s ‘String of Pearls’ – Real or Fake?
by Maha Atal
Source – Forbes, published February 2, 2013

Dan Drezner has a blog post up arguing that China‘s ‘string of pearls’ is a figment of journalists’ imaginations. The ‘string of pearls’ is the name given to China’s strategic investments in South and Southeast Asia, which, when plotted on a map, look awfully like a string of pearls encircling IndiaPakistan is critical to this strategy, both because of its size and its location. Drezner is right to suggest that without the Sino-Pakistani link, the string of pearls theory doesn’t hold.

I’ve written about the string of pearls, and specifically about its Pakistani component, several times, for Forbes and other outlets, and I confess I’m not fully persuaded by Drezner’s critique.

1. Drezner depicts the Sino-Pakistani relationship as something that has arisen in response to the U.S. presence in the region and China’s growth:

Please click here to read the rest of article at its source. Read the rest of this entry »

Filed under: Beijing Consensus, Charm Offensive, Chinese Model, Communications, Forbes, Foreign aid, Government & Policy, India, Influence, International Relations, military, Pakistan, Peaceful Development, Politics, Public Diplomacy, Soft Power, Strategy, Territorial Disputes, The Chinese Identity

Will China Build 82 Unneeded Airports By 2015? You Betcha. [Forbes]

Forbes: Chinese airports – Potential for growth or sinkhole? Gordon Chang on what can be described as binge spending as China ramps up to 230 airports, up from the existing 182. Chinese state media (Small airports to ride construction boom, China Daily, July 21, 2012) points out however, that this is paltry compared to the 19,000 in the U.S and 700 in Brazil. Some criticism is leveled at the losses made by 130 of the current airports as they collectively lost more than 2 billion yuan. It does seem China’s quest for connecting its peripheral frontiers and people through planes, trains and automobiles will continue to be relentless.

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Will China Build 82 Unneeded Airports By 2015? You Betcha.
by Gordon Chang
Source – Forbes, published July 22, 2012

On Friday, Li Jiaxiang, director of the Civil Aviation Administration of China, announced his country will build 82 new airports and expand 101 existing ones during the current five-year plan, the 12th, which ends in 2015.

By then, China will have 230 airports, up from the current 182, according to Huang Min, director of infrastructure at the National Development and Reform Commission.  Most of the new facilities will be feeder airports in the central and western portions of the country.  About 80% of the population will be within 100 kilometers of an airport by the middle of this decade.  Additional building is projected to increase that percentage nine points by 2020.

Does China need all these new airports?  Beijing justifies the ambitious building program on several grounds.  State media, for instance, points to the aviation industry’s three decades of double-digit growth and suggests that is just the beginning.  China’s aviation market, according to central government officials, has the biggest potential for expansion in the world.  State media notes that, in comparison, the U.S. has 19,000 airports.  Li Jiaxiang on Friday said even Brazil and South Africa have more of them than China.  And China’s airports are a booming industry.  Last year, they earned 4.6 billion yuan according to Mr. Li. Read the rest of this entry »

Filed under: Beijing Consensus, Chinese Model, Domestic Growth, Economics, Forbes, Government & Policy, Infrastructure, Modernisation, Social, The Chinese Identity, , ,

China’s Energy Grab Is No Green Affair [Forbes]

“Green energy is desirable, but try telling China to limit its consumption, production, and acquisition of traditional oil, gas, and coal resources and see how far you get.” According to this analysis by Dr. Economides, China’s love affair with green energy seems like a thinly veiled guise whilst it grabs foreign fossil energy resources elsewhere. I agree largely. Pragmatism for stable growth is always China’s main priority. Doing whatever it takes to keep that resource environment in their favour is exactly what they will do.

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China’s Energy Grab Is No Green Affair
Dr. Michael Economides
Source – Forbes Blogs, published June 17, 2010

During President Obama’s Oval Office address to the nation on the subject of the BP oil spill, the chief executive pointed to China as a leader in clean energy investment in hopes of urging Congress to enact legislation that would encourage the U.S. to expand its own green energy spending. While the president has the right to call for more green investment, his reference to the role of green energy in China told only a very tiny and self-serving part of the story.

China’s clean energy spending, indeed, is at a high monetary level, but what the president fails to mention is the utterly massive level of spending that the Chinese have embarked upon in pursuit of expanding their traditional energy portfolio. As Kate MacKenzie points out in her recent Financial Times piece, Chinese national oil companies have embarked on a “mega-spree” of fossil energy foreign acquisitions, accounting in fact for almost 20% of the world’s global deal value in the first quarter of 2010.

Recently, Chinese oil giant Sinopec paid ConocoPhillips $4.65 billion to acquire its share in a Canadian tar sands project. Weeks later came the company’s $2.46 billion acquisition of Angola’s deep water oil reserves and a $7.56 billion acquisition of Swiss-based Addax Petroleum. PetroChina has announced a$20 billion loan to Venezuela to be paid by oil and the company will spend at least $60 billion over the next 10 years to acquire more oil and gas assets abroad. Even more recently, CNOOC, China’s third largest oil company, paid $6 billion to acquire the Brazilian Peregrino field. Read the rest of this entry »

Filed under: Beijing Consensus, Charm Offensive, Chinese Model, Domestic Growth, Economics, Environment, Forbes, Influence, International Relations, Politics, Resources, U.S.

U.S.-China Relations with Lee Kuan Yew [Forbes.com]

Minister Mentor Lee Kuan Yew accurately sums up U.S.-China relations in this opinion piece, and I think very few around are as perceptive of relations between the two, than Mr. Lee, the British-educated founder of contemporary Singapore of Hakka Chinese descent. There were two points raised that really piqued my attention. First, that despite all of the media overture on Chinese growth, it still only has a modest at best per capita GDP ranked at 104th in the world. Second, the Chinese are taking great care not to let the media paint a picture of them as tyrants – the peaceful rise is what they want to be seen as embracing –  as this article points out, China wants to be seen as a loveable panda, whereas the US has always taken the menacing grizzly bear approach. An interesting analogy.

I also read with great interest this comment by a reader of the Forbes article below. He/She shares a very pertinent point – that misreporting occurs to feed economic agendas. Ah, the perils of transnational media corporations who paint pictures according to where the economic gain blows.

“US media has always misleading average Americans in China related issues. Most written articles are strongly politically bias. Of course, there is a deficit trade with China because almost all of US multinational companies had moved to China to take advantage of cheap labor & raw materials. Who made the big profit here? Not average Chinese workers (50 cents/hr or less) but US companies themselves. Because these companies are located in China so their revenues & profits will show as China GDP & Export. Not to blame the Chinese for the manufactering (sic) jobs loss since those jobs were deliberately moved out of US to reduce producing cost for the companies. If the Chinese did not get those jobs then they would move to other low labor cost markets: India, Malaysia, Indonesia…etc but surely will not come back to US. I love America & Americans but not the goverment & Wallstreet which make money for a few elites at all cost. Remember everyone of us want a decent life for out family no matter what country we are in. America is a great country. Media’s job is to present the facts & educate people not to confuse and brainwash.”

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U.S.-China Relations
by Lee Kuan Yew
Source – Forbes.com, published  n.d. 2010

During an important policy conference president Barack Obama said the Chinese yuan (RMB) is kept at an artificially low level, giving China an unfair advantage in selling its exports. Obama did not call China a currency manipulator, but he said the U.S. has “to make sure that our goods are not artificially inflated in price and their goods are not artificially deflated in price.” U.S. exports to China in 2008 were $69.7 billion compared with imports of $337.8 billion, a deficit of $268 billion. Imports were five times the value of exports.

China has resisted calls to up-value the yuan, suspecting these are attempts to slow its growth. Yet Western economists unanimously agree that the yuan is undervalued by 24% to 40% and that the currencies of Hong Kong, Malaysia, Taiwan and Singapore also need to rise in order to correct their trade imbalances with the U.S. But as long as the yuan doesn’t appreciate neither can the currencies of other East Asian countries, unless they’re willing to lose their market share in exports.

Premier Wen Jiabao of China has said, “We will not yield to any pressure of any form forcing us to appreciate.” China has urged the U.S. to maintain the value of the dollar and has reduced its holdings in U.S. Treasuries by 3.7%, or $34 billion. China attacked the U.S. policy of selling arms to Taiwan, threatening sanctions against American firms and noncooperation on international issues. Thus, China resisted American initiatives on climate change in Copenhagen and has not backed tougher sanctions against Iran. Beijing has also expressed great anger over President Obama’s meeting with the Dalai Lama at the White House, issuing a terse statement that the U.S. had “grossly violated the norms governing international relations.”

At the Copenhagen summit on climate change Western media reported that Premier Wen refused to attend a meeting of key leaders called by President Obama, sending Vice Foreign Minister He Yafei in his stead. This meant that Obama, a President, had to call on Wen, a premier. The Financial Times ran a front-page photo capturing the moment: a U.S. President leaning forward with arms outstretched, apparently pleading with a Chinese premier, who remained seated with hands folded and fingers interlaced, looking stone-faced. Xinhua, China’s leading newspaper, knew the picture did not show China in a good light; it ran a photograph of Premier Wen looking less imperious.

What has changed in U.S.–China relations? The U.S. economy has tanked, with China holding more than $2.4 trillion in U.S. Treasuries and other assets, which means the U.S. needs China’s cooperation in order to stabilize its economy.

The increase in tensions between the two nations caused an American leader close to the White House to ask me why China’s posture has changed. I could not explain why. So when I met the Chinese state councillor in January, I showed him the FT photo. The state councillor responded that it was a misunderstanding.

I then added that foreign officials, including Singapore’s, in negotiating with Chinese officials on joint statements have found them to be pushier and tougher to deal with. The state councillor responded in succinct Chinese, “When we are not strong we should not be proud, and when we are strong we will still not be proud.” I agreed and complimented him on his speech in Jakarta in which he had pointed out that China’s per capita GDP was modest, ranking 104th in the world.

Tit for Tat
Meanwhile, various commercial disputes have arisen between China and the U.S., making people wonder if these developments will lead to more protectionism and affect the global economy. The issues include antidumping duties on U.S. chicken products; levies on Chinese-made tires and oil well pipes; allegations by the U.S. that China has raised the international prices of several raw materials through export restrictions while keeping input costs lower for manufacturers in China; and China’s censorship of GoogleGOOG – news people ) and whether that constitutes an unfair barrier to trade.

In its quest to become a world power China has chosen to take the path of the “peaceful rise.” It projects the image of a cuddly Chinese panda, compared with the fierce American grizzly bear. Chinese leaders are in the midst of finding the right balance between keeping a low profile and exerting their growing influence. As a result, astute observers find China fumbling from time to time in its reach for the right balance in its public positions.

Deng Xiaoping summed up the U.S.-China relationship in an epigram in the 1980s: There are inherent limits to better relations and inherent limits to bad relations.

With its rapid economic growth and the concurrent shift in the balance of power, China has become more strident in its protests against U.S. arms sales to Taiwan and the President’s meeting with the Dalai Lama. But Americans expect this and are taking these barbs in stride. They know that the fundamentals of the two countries’ joint strategic interests will prevent the complete severing of cooperation. China needs the U.S. export market, investments and technology; America needs the low-cost daily necessities made in China to fill itsWal-MartWMT – news – people ) stores.

The world’s monetary and political problems require both countries to take parallel policy paths. Cooperation and competition will continue, and relations will move forward, regardless of periodic conflicts.

Lee Kuan Yew, minister mentor of Singapore; David Malpass, global economist, president of Encima Global LLC; Amity Shlaes, senior fellow in economic history at the Council on Foreign Relations; and Paul Johnson, eminent British historian and author, rotate in writing this column. To see past Current Events columns, visit our Web site atwww.forbes.com/currentevents.

Filed under: Beijing Consensus, Charm Offensive, Culture, Economics, Forbes, Influence, International Relations, Media, Politics, Singapore, U.S.

China’s U.S. Debt Quandary

Rather old news coming from March earlier this year, but a good read nonetheless. China can not be a limitless sponge for US debt forever, and the quagmire it has gotten itself into deserves a bit of understanding.

Quotable Quotes – “Some of these critics suspect that the Federal Reserve essentially prints more money not just to stimulate the economy, but also to devalue China’s U.S. dollar portfolio, undermining a rival power.

China’s U.S. Debt Quandary
by Gady Epstein
Source – Forbes, 19 March 2009

U.S. investors may have cheered the Federal Reserve’s decision this week to pump more than 1 trillion new dollars into the economy, but at least one faction in China was on the verge of tears.

“I want to cry, really want to cry,” wrote one Beijinger on Thursday, posting on one of China’s most popular portals, Sina.com. The problem was that by issuing more currency, the Fed was potentially weakening the U.S. dollar, making China’s dollar-based investments worth less. “Those elites insist on buying American bonds.”

One of “those elites” under fire is Premier Wen Jiabao. When he expresses public angst about the safety of China’s holdings of U.S. debt, he is speaking partly to domestic critics who believe Chinese leaders have unwisely tied their country’s fate to the U.S. economy. Many of the critics may be crackpots and conspiracy theorists, but they have a point.

They know that their government is now America’s largest creditor, with more than half of its $2 trillion in foreign exchange reserves invested in Treasury securities and other U.S. government bonds. Some of these critics suspect that the Federal Reserve essentially prints more money not just to stimulate the economy, but also to devalue China’s U.S. dollar portfolio, undermining a rival power.

It may be a paranoid theory, but it is a popular one. One of China’s bestselling books in the past 18 months is Currency Wars, a conspiratorial screed that suggests that Western financial interests, including the Federal Reserve, seek to destroy the Chinese economy. The book has sold more than 1 million copies officially, and probably several million more pirated copies, and remains a bestseller now as economic conditions deteriorate.

Any leaders who choose to ignore this populist thinking risk being branded as sellouts. Last fall, as the financial crisis was unfolding, an incendiary letter circulated on the Internet claiming that a clique of Chinese elites, led by investment banker and former Premier Zhu Rongji’s son Levin Zhu, formed a “foreign financial interest cartel” that has betrayed the interests of the Chinese people to enrich themselves and their cronies.

The letter named as co-conspirators the men running China’s $200 billion sovereign wealth fund, whose disastrous investments in the Blackstone Group (nyse: BX – news people ) and Morgan Stanley (nyse: MS – news – people ) have lost China billions. People’s Bank of China Governor Zhou Xiaochuan, China’s Ben Bernanke, was singled out for investing too much in Treasurys as the dollar was depreciating–more reasoning straight out of Currency Wars.

The believers are not just fire-breathing ideologues. “Many technocrats believe in this argument that the U.S. is trying to screw over China by cheapening the dollar,” says Victor Shih, a political economist and China specialist at Northwestern University. Shih learned of the influential reach of “Currency Wars” when he visited last summer with bureaucrats from the People’s Bank of China.

“Many PBOC officials bought into the arguments of this book and I think they’ve been writing a lot of reports to Wen Jiabao saying we’re holding a lot of dollars and we’re exposed to this risk,” Shih says. “And essentially that’s true.”

There’s the rub. Almost by accident, the conspiracy theories cut straight to what many economists consider a fundamental weakness in China’s monetary policy, and the leadership knows it. China has accumulated huge U.S. dollar reserves to keep the value of its own currency down, economists say, increasing its dependency on exports and decreasing its ability to invest more domestically.

“You’re making your economy more dependent on the rest of the world,” says Brad W. Setser, an economist at the Council on Foreign Relations who has closely monitored China’s sovereign investments. “You’re relying on demand from the rest of the world to maintain domestic employment rather than, say, running a fiscal deficit.”

Now China is locked into a situation where it needs the U.S. economy to rebound, but as the U.S. spends trillions of dollars to make that happen, it devalues the one currency China is most heavily invested in and pegged against. That forces China to continue buying U.S. dollars both to keep the value of its currency down and to protect its portfolio, so China ends up helping finance the U.S. economic recovery plan.

According to Setser, there is “no good historical analogy” for this situation. Never before has the U.S. been so heavily financed by one country. That relationship has already been the subject of much hand-wringing in the U.S., but it may be an even more volatile political problem for China.

It’s the old debtor’s aphorism, writ on a sovereign scale: If you owe China $1 billion, it’s your problem. If you owe China $1 trillion, it’s China’s problem.

Filed under: Economics, Forbes, U.S.

The World’s Most Powerful People 2009

Obama’s top gun and China’s Hun Jintao’s second. Pretty reflective of the new status quo with China in the picture? I reckon so, although it does not quite say so in the below report.

Nevertheless, this is the entry on Hu Jintao – “Paramount political leader of more people than anyone else on the planet; 1.3 billion Chinese, some 70% in their prime working years of ages 15 to 64 powering world’s low-cost workshop, transforming nation. Biggest buyer of U.S. debt avoided Chinese meltdown during financial crisis with massive stimulus package to encourage domestic spending. “Coming-out party” at 2008 Beijing Olympic Games showcased young, modern, harmonious society; reality often quite different—few political, religious, press freedoms; brutal suppression of Tibet; refusal to acknowledge Taiwanese independence. Still, credible estimates have China poised to overtake U.S. as world’s largest economy in 25 years—although, crucially, not on a per-capita basis.

Surf onto the site here to have a look


Special Report
The World’s Most Powerful People
Michael Noer and Nicole Perlroth
Source – Forbes Online (Go here for the full read)

I love power. But it is as an artist that I love it. I love it as a musician loves his violin, to draw out its sounds and chords and harmonies.” –Napoleon Bonaparte

Power has been called many things. The ultimate aphrodisiac. An absolute corrupter. A mistress. A violin. But its true nature remains elusive. After all, a head of state wields a very different sort of power than a religious figure. Can one really compare the influence of a journalist to that of a terrorist? And is power unexercised power at all?

n compiling our first ranking of the World’s Most Powerful People we wrestled with these questions–and many more–before deciding to define power in four dimensions. First, we asked, does the person have influence over lots of other people? Pope Benedict XVI, ranked 11th on our list, is the spiritual leader of more than a billion souls, or about one-sixth of the world’s population, whileWal-MartWMT – news – people ) CEO Mike Duke (No. 8) is the largest private-sector employer in the United States.

In Pictures: The World’s Most Powerful People

Then we assessed the financial resources controlled by these individuals. Are they relatively large compared with their peers? For heads of state we used GDP, while for CEOs, we looked at a composite ranking of market capitalization, profits, assets and revenues as reflected on our annual ranking of the World’s 2000 Largest Companies. In certain instances, likeNew York Times Executive Editor Bill Keller (No. 51), we judged the resources at his disposal compared with others in the industry. For billionaires, like Bill Gates (No. 10), net worth was also a factor.

Next we determined if they are powerful in multiple spheres. There are only 67 slots on our list–one for every 100 million people on the planet–so being powerful in just one area is not enough to guarantee a spot. Our picks project their influence in myriad ways. Take Italy’s colorful prime minister, Silvio Berlusconi (No. 12) who is a politician, a media monopolist and owner of soccer powerhouse A.C. Milan, or Oprah Winfrey(No. 45) who can manufacture a best-seller and an American President.

Lastly, we insisted that our choices actively use their power. Ingvar Kamprad, the 83-year-old entrepreneur behind Ikea and the richest man in Europe, was an early candidate for this list, but was excluded because he doesn’t exercise his power. On the other hand, Russian autocrat Vladimir Putin (No. 3) scored points because he likes to throw his weight around by jailing oligarchs, invading neighboring countries and periodically cutting off Western Europe’s supply of natural gas.

To calculate the final rankings, five Forbes senior editors ranked all of our candidates in each of these four dimensions of power. Those individual rankings were averaged into a composite score, which determined who placed above (or below) whom.

U.S. President Barack Obama emerged, unanimously, as the world’s most powerful person, and by a wide margin. But there were a number of surprises. Former President George W. Bush didn’t come close to making the final cut, while his predecessor in the Oval Office, Bill Clinton, ranks 31st, ahead of a number of sitting heads of government. Apple’s ( AAPL – news – people ) Steve Jobs easily made the list, while Arnold Schwarzenegger, the movie star governor of California (which alone has an economy larger than Canada’s) did not.

This ranking is intended to be the beginning of a conversation, not the final word. Is the Dalai Lama (No. 39) really more powerful than the president of France (No. 56)? Do despicable criminals like billionaire Mexican drug lord Joaquín Guzmán (No. 41) belong on this list at all? Who did we overlook? What did we get wrong?

Filed under: Forbes, The World's Most Powerful People 2009

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