Bank of China Ltd. said it cut off dealings with North Korea's primary foreign-exchange bank in the first publicly announced move by a Chinese state-owned company to distance itself from Pyongyang and its young leader Kim Jong Eun.
NY Times: “Whenever China wants to identify the issues considered important enough to go to war over, it uses the term “core interests.” The phrase was once restricted to Taiwan, the island nation that China has threatened to forcibly unify with the mainland. About five years ago, Chinese leaders expanded the term to include Tibet and Xinjiang, two provinces with indigenous autonomy movements that Beijing has worked feverishly to control.
Since then, Chinese officials have spoken more broadly about economic growth, territorial integrity and preserving the Communist system. But recently they narrowed their sights again, extending the term explicitly to the East China Sea, where Beijing and Tokyo are dangerously squabbling over some uninhabited islands. Top Chinese military officials first delivered the message to Gen. Martin Dempsey, chairman of the Joint Chiefs of Staff, when he visited Beijing last month. The next day, the Foreign Ministry spokeswoman, Hua Chunying, told reporters that “the Diaoyu Islands are about sovereignty and territorial integrity. Of course it’s China’s core interest.”
This wording, with its threatening implications, is raising new tensions in a region already on edge over North Korea and several other maritime disputes, and it will make it harder to peacefully resolve the dispute over the islands, called Diaoyu in China, and Senkaku in Japan.
While Japan has held the islands for more than a century, China also claims title and has sent armed ships and planes from civilian maritime agencies to assert a presence around them. The waters adjacent to the islands are believed to hold oil and gas deposits.
To some extent, China is simply throwing its weight around, challenging the United States and its regional allies. On Wednesday and Thursday, Chinese state-run newspapers carried commentaries questioning Japan’s sovereignty over the island of Okinawa, where about 25,000 American troops are based. Japan, whose wartime aggression against China and other countries still engenders animosity, has not helped. Last September, the government of Prime Minister Yoshihiko Noda provocatively bought three of the islands from their private owner.”
China responds to US-initiated action action North Korea.
SCMP: “Bank of China has shut the account of North Korea’s main foreign exchange bank, which was hit with US sanctions in March after Washington accused it of helping finance Pyongyang’s nuclear weapons programme.
The state-run Foreign Trade Bank had been told its transactions had been halted and its account closed, Bank of China, the country’s biggest foreign exchange bank, said in a brief statement on Tuesday. It gave no reason for the closure and the bank declined to comment further.
The closure is the first significant, publicly announced step taken by a Chinese entity to curb its dealings with North Korea in the wake of international pressure to punish Pyongyang over its banned nuclear and ballistic missile programmes.
“I think it is indeed a very noteworthy action,” said Zhang Liangui, a North Korea expert at China’s Central Party School, adding Bank of China was probably concerned about its reputation and thus closed the account.
“In taking this action I think there are political considerations as well as considerations about its own interests.”
The US sanctions prohibit any transactions between US entities or individuals and the Foreign Trade Bank.
Japan has followed suit while Australia is expected to do the same soon. Washington has also urged the European Union to impose sanctions on the Foreign Trade Bank and has raised the issue with China, although Beijing has not commented publicly on the bank.
Experts have said Washington’s move was designed to make foreign banks that do business in the United States think twice about dealing with the Foreign Trade Bank, in much the same way that banks have become wary about having ties with financial institutions in sanctions-hit Iran.
China is North Korea’s traditional ally and its biggest trading partner. It is unclear how much of the US$6 billion in annual bilateral trade goes through the Foreign Trade Bank.
Among China’s other large banks, a spokesman at China Construction Bank said the bank did not do any business with the Foreign Trade Bank. Industrial and Commercial Bank of China and Agricultural Bank of China were not immediately available for comment.
China has become increasingly frustrated with North Korea in recent months. It agreed to new UN sanctions after Pyongyang conducted its third nuclear test in February.
Those sanctions, announced on March 7, target the North’s attempts to ship and receive cargo related to its nuclear and missile programmes and tighten financial curbs, including the illicit transfer of bulk cash.
The UN measures did not address the Foreign Trade Bank. Washington imposed its own sanctions several days later.”
The Times: “One died in Boston, the other lost her home in Sichuan. Both symbolised the hopes of millions
Last week in different corners of the planet, the lives of two very important Chinese women were ripped apart: one on the streets of Boston, the other under the rubble of the Sichuan earthquake. Both women were living the Chinese Dream. And both could spell big trouble for President Xi Jinping.
Lu Lingzi was a 23-year-old mathematics graduate student at Boston University, who died in the marathon bombing. The hard-working daughter of hard-working, white-collar parents from Shenyang, she was a paragon of the generation that has emerged as China’s economy grows and the new middle classes replicate themselves for the first time in history. Not a single opportunity in Lingzi’s short life was squandered. She battled for internships at banks and accounting firms. The family saved every yuan so that their daughter could study in the United States.
The other woman is Wei Ruqun, a victim of last Saturday’s earthquake. She is alive but has almost nothing to live for. Now 47, Ruqun has toiled in a variety of factories since her teens as one of China’s 260 million migrant workers whose sweat and aspiration have fuelled the country’s industrial engine.
Her career, a diverse list of drudgery that includes assembling cheap goods for export to the West, has won her some tiny shavings from the Chinese economic boom, hard-won dividends of the version of capitalism that Beijing unleashed in the 1980s, which allowed hundreds of millions of peasants to imagine themselves as consumers for the first time. Over the decades Ruqun saved to buy a small house in the village where she was born. On Saturday, a few months after the dream house was finished, it collapsed in the earthquake with family members inside.
The two women’s fates — reported on TV and discussed on Weibo, China’s version of Facebook and Twitter — have humanised for many Chinese people social trends almost too big and fast-moving to think about in the abstract. By studying abroad, Lingzi was fulfilling an increasingly common middle-class dream. Her story has fascinated tens of millions of middle-class Chinese who know someone like her or want to do what she did. Ruqun is one of hundreds of micro-tragedies of the Sichuan quake. Barely an adult in China cannot imagine the agony of losing a house that represents your life savings.
The two women are important for the ease with which ordinary Chinese can empathise with them. But they are politically important too. Both are the creations and creators of what will soon be the largest economy on Earth. The loss of Lingzi and the shattering of Ruqun are personally terrible, but their significance lies in the fact that there are thousands, perhaps millions, of Chinese women like them: all patiently shaping individual aspiration into something real. Their two lives, though different in so many ways, are perfect products of China 2013.”
WSJ: “A draft U.S. immigration law, likely to be unveiled this week, holds good and bad news for Indian IT companies.
Indian outsourcing firms like Infosys 500209.BY -1.71% Tata Consulting Services 532540.BY +0.64% and Wipro have large offices in the U.S. that service American clients. To keep costs down, these firms send thousands of Indian workers to such centers on skilled worker, or H-1B, visas.
Indian firms have long argued a cap on these visas is unfair. This year the cap of 65,000 H-1B visas already has been reached, meaning Indian companies will need to hire more-expensive short-term workers locally in the U.S., depressing their margins.
The draft U.S. immigration law, described to the Wall Street Journal by Senate aides, aims to drastically overhaul the nation’s immigrations procedures. It seeks to create a pathway to citizenship for some 11 million people living in the U.S. illegally.
For Indian firms, the bill’s interest lies in changes it proposes for the H-1B program. The legislation seeks to increase the cap on these visas to 110,000, with the ability to go as high as 180,000 depending on economic conditions and demand. An additional 25,000 visas would be available for people who have earned advanced degrees in the U.S.
But that’s where the good news ends, says the National Association of Software and Services Companies, or Nasscom, the Indian IT industry trade body. It is worried by other proposals in the bill that will demand employers who want to tap the high-skilled-visa program to “pay significantly higher wages for H-1B workers than under current law.”
The bill also would require those employers to advertise open jobs for 30 days on a U.S. Department of Labor website before they could bring in foreign workers. Employers who rely heavily on non-U.S. workers would be forced to pay higher fees.
The idea here is to soften criticism in the U.S. that the visa program is being used to give jobs to Indian and other foreign workers that U.S. employees could do at a time of relatively high unemployment.
“The comprehensive immigration reform was necessary in the U.S. It’s good that it’s happening,” says Ameet Nivsarkar, vice president of Nasscom. But he said the association was worried the higher wage provision could be used to keep out Indian companies, by far the biggest users of H-1B visas.
“Our single biggest worry is that these rules may be applied in a discriminatory manner, only on a certain section of companies,” Mr. Nivsarkar said.
Nasscom is lobbying for a fairer visa policy in the U.S., he said. “That’s our job. We are working through our partners in the U.S. and with the government in India.”
More than 80% of the operating costs of Indian technology companies come from wages. Salaries to employees at overseas locations account for half of total wage costs. Any increase in overseas salaries may squeeze the profitability of the companies, analysts say.
“Any crimp on the movement of human capital will hurt trade between India and the U.S. and will eventually impact both Indian and non-Indian services companies, as well as their U.S. clients,” says Siddharth Pai, president of the Asia-Pacific business of U.S.-based technology advisory services firm Information Services Group.
By raising the overall costs for skilled-worker visas, the U.S. is raising barriers to trade with India, he added.”
China Daily: “China on Tuesday issued a white paper on national defense elaborating its new security concept and peacetime employment of armed forces.
The document, the eighth of its kind issued by the Chinese government since 1998, says China advocates a new security concept featuring mutual trust, mutual benefit, equality and coordination, and pursues comprehensive security, common security and cooperative security.
“China will never seek hegemony or behave in a hegemonic manner, nor will it engage in military expansion,” the white paper says.
According to the document, China will build a strong national defense and powerful armed forces which are “commensurate with China’s international standing and meet the needs of its security and development interests.”
The paper warns that China still faces multiple and complicated security threats and challenges.
The issues of subsistence and development security and traditional and non-traditional threats to security are interwoven, the document says.
“Therefore China has an arduous task to safeguard its national unification, territorial integrity and development interests,” it says.
The paper elaborates on the country’s diversified employment of the armed forces in peaceful times, saying that it responds to China’s core security needs and aims to maintain peace, contain crises and win wars.
Chinese armed forces are employed to safeguard borders, coastal and territorial air security and they will strengthen combat-readiness and combat-oriented exercises and drills, it says.
And they will readily respond to and resolutely deter any provocative action which undermines China’s sovereignty, security and territorial integrity.
In this paper, the People’s Liberation Army (PLA) for the first time reveals the actual number of army, navy and air force servicemen, designations of its army combined corps and the main missile lineup.
China now has about 850,000 army servicemen in 18 combined corps and additional independent combined operational divisions (brigades), according to the paper.
The combined corps, composed of divisions and brigades, are respectively under seven military area commands.
Currently, the PLA Navy has a total strength of 235,000 officers and men, and commands three fleets — the Beihai Fleet, the Donghai Fleet and the Nanhai Fleet.
The PLA Air Force now has about 398,000 officers and men and an air command in each of the seven military area commands of Shenyang, Beijing, Lanzhou, Jinan, Nanjing, Guangzhou and Chengdu. In addition, it boasts one airborne corps.
The PLA Second Artillery Force, the country’s core force for strategic deterrence, is composed of nuclear and conventional missile forces and operational support units, according to the paper.
It is equipped with a series of “Dong Feng” ballistic missiles and ”Chang Jian” cruise missiles.
It also has under its command missile bases, training bases, specialized support units, academies and research institutions.”
My belief is that the world has got it wrong.
I believe that North Korea is trying to reprise the plot of the film “The Mouse That Roared“ which is a 1955 Cold War satirical novel by Irish-American writer Leonard Wibberley, which launched a series of satirical books about an imaginary country in Europe called the Duchy of Grand Fenwick. Wibberley went beyond the merely comic, using the premise to make still-quoted commentaries about modern politics and world situations, including the nuclear arms race, nuclear weapons in general, and the politics of the United States.
The Plot: The tiny (three miles by five miles) European Duchy of Grand Fenwick, supposedly located in the Alps between Switzerland and France, proudly retains a pre-industrial economy, dependent almost entirely on making Pinot Grand Fenwick wine. However, an American winery makes a knockoff version, “Pinot Grand Enwick”, putting the country on the verge of bankruptcy.
The prime minister decides that their only course of action is to declare war on the United States. Expecting a quick and total defeat (since their standing army is tiny and equipped with bows and arrows), the country confidently expects to rebuild itself through the generous largesse that the United States bestows on all its vanquished enemies (as it did for Germany through the Marshall Plan at the end of World War II and for Japan through the McArthur Plan).
Nothing else makes sense.
Reuters: “China deplored tension on the Korean peninsula on Sunday and in an apparent reference to North Korea, said no country should be allowed to plunge the region into chaos after the United States postponed a missile test to ease talk of war.
The North, led by 30-year-old Kim Jong-un, has been issuing threats of war against the United States and U.S.-backed South Korea since the United Nations imposed sanctions after its third nuclear weapon test in February.”
China Daily: “Chinese tourists have overtaken Germans as the world’s biggest-spending travellers after a decade of robust growth in the number of Chinese holidaying abroad, the United Nations World Tourism Organisation (UNWTO) said on Thursday.
Chinese tourists, known for travelling in organised tours and snapping up luxury fashion abroad, spent $102 billion on foreign trips last year, outstripping deep-pocketed travellers from Germany and the United States.
Chinese tourists spent 41 percent more on foreign travel in 2012 than the year before, beating the close to $84 billion both German and U.S. travellers parted with last year.
Tourists from other fast-growing economies with swelling middle classes, like Russia and Brazil, also increased spending in 2012. In recession-hit Europe, however, French and Italian tourists reined in their holiday budgets.
“The impressive growth of tourism expenditure from China and Russia reflects the entry into the tourism market of a growing middle class from these countries,” said UNWTO Secretary-General Taleb Rifai.”
Foreign Policy: “It’s over for America,” a Chinese academic told me in late 2008, two days after Goldman Sachs turned itself into a commercial bank in order to fend off possible collapse. “From here on, it’s all downhill.” Sitting in Beijing as American capitalism seemed to be hanging by a thread, it was easy to believe that one era was ending and another beginning.
The past half-decade should have been the glory years for the spread of Chinese influence around the world. After China’s ravishing 2008 Beijing Summer Olympics, and its startling recovery from the financial crisis, it had a platform to push for a bigger voice in international affairs. At a time when the United States has been navel-gazing on its own deficiencies and beset by dysfunction and infighting in Congress, China has quickly become the main trading partner for a long list of countries, not just in Asia, which should give it all sorts of sway. And at the very least, many Chinese assume, the country should start to resume its role as the natural leader in Asia.
Yet the years since the crisis have demonstrated something very different. Rather than usher in a new era of Chinese influence, Beijing’s missteps have shown why it is unlikely to become the world’s leading power. Even if it overtakes the United States to have the biggest economy in the world, which many economists believe could happen over the next decade, China will not dislodge Washington from its central position in global affairs for decades to come.
China is certainly not lacking in ambition, even if many of its final goals are not clearly articulated. It is implementing plans which challenge U.S. military, economic, and even political supremacy. But on each front, the last few years have demonstrated China’s limitations, not the inevitability of its rise.
China’s effort to gradually squeeze the U.S. Navy out of the Western Pacific did not start with the financial crisis in 2008. The financial crisis did, however, coincide with a new aggressiveness in the way China has pushed its territorial claims in the South China Sea and the East China Sea. Beijing has scored at least one victory, securing control of the Scarborough Shoal, a group of small islands in the South China Sea, from the Philippines in 2012.
But among these tactical successes, China has been sowing the seeds of a strategic defeat. China’s assertiveness is generating intense suspicion, if not outright enmity, among its neighbors. Its “peaceful rise” is not taking place in isolation. There may be echoes in today’s Asia of the late-nineteenth century in Europe and North America, but this is the one critical difference. The United States came into its own as a great power without any major challenge from its neighbors, while Germany’s ascent was aided by the collapsing Austro-Hungarian and Ottoman empires and Russian monarchy on its frontiers. China, on the other hand, is surrounded by vibrant countries with fast-growing economies, from South Korea to India to Vietnam, who all believe that this is their time, as well. Even Japan, after two decades of stagnation, still has one of the most formidable navies in the world, as well as the world’s third largest economy. China’s strategic misfortune is to be bordered by robust and proud nation-states which expect their own stake in the modern world.
The last few years have shown that these countries have no desire to return to a Sinocentric Asia, as existed before the arrival of Western powers in the late-fifteenth century, and one where China is the undisputed leader. All the talk about the Obama administration’s “pivot” to Asia has obscured the much bigger shift that has taken place in the region since the crisis — almost all of China’s neighbors are now deeply anxious about what a powerful, expansionist leadership in Beijing portends for their future. They still want to trade with China, but they also want protection from Beijing’s bullying.”
- China using Senkakus dispute to test Japan, U.S. (japantimes.co.jp)
- China: New leaders, same assertive foreign policy – CNN International (edition.cnn.com)
- Vietnam accuses China over sea clash (bbc.co.uk)