Chindia Alert: You’ll be Living in their World Very Soon
aims to alert you to the threats and opportunities that China and India present. China and India require serious attention; case of ‘hidden dragon and crouching tiger’.
Without this attention, governments, businesses and, indeed, individuals may find themselves at a great disadvantage sooner rather than later.
The POSTs (front webpages) are mainly 'cuttings' from reliable sources, updated continuously.
The PAGEs (see Tabs, above) attempt to make the information more meaningful by putting some structure to the information we have researched and assembled since 2006.
BRUSSELS (Reuters) – The euro zone’s trade surplus with the rest of the world grew in February, with a decline in imports from China as well as sharply lower energy needs because of mild winter weather.
The unadjusted goods trade surplus grew to 23.0 billion euros ($25.1 billion) in February, compared with 18.5 billion euros a year earlier. Exports rose by 1.6%, while imports fell by 1.0%.
For China, which already had widespread coronavirus restrictions in place in February, exports from the European Union as a whole were slightly lower than in February 2019. However, imports were down by 8.1%, according to data on Eurostat’s website.
Energy imports as a whole also declined by 9.6% in February, when comparing Jan-Feb data issued on Monday and January data from a month ago. That translated into 10.1% lower imports from Russia and 5.9% less from Norway.
The trade surplus with the United States, by contrast, grew by 21% in the month as exports increased and imports declined. The persistent surplus in goods has been a source of transatlantic tension.
On a seasonally adjusted basis the euro zone trade surplus also rose to 25.8 billion euros in February from 18.2 billion euros in January. Exports were 1.8% higher month-on-month and imports 2.3% lower.
As US financial support expires in 2023, Beijing could ‘loosen the screws’ on regional alliance with lucrative development deals
Independence vote in Micronesia’s Chuuk state in March could raise the stakes, potentially allowing China access to strategically vital waters
President of the Federated States of Micronesia David Panuelo shakes hands with Chinese Premier Li Keqiang at the Great Hall of the People in Beijing. Photo: Xinhua
In China earlier this month, David Panuelo, the president of the Federated States of Micronesia, climbed the Badaling section of the Great Wall. And, according to Huang Zheng, Beijing’s ambassador to the Pacific nation, the countries’ “great friendship rose to even greater heights” during Panuelo’s visit.
Chinese investment in Micronesia reached similarly lofty levels in conjunction with Panuelo’s trip, which marked three decades of diplomatic ties and included meetings with President Xi Jinping and Premier Li Keqiang. Beijing has committed US$72 million in economic development deals, almost as much as its total investment of the previous three decades.
Micronesia is one of three Pacific nations with agreements with Washington, known as the Compact of Free Association (COFA), which allows their citizens to live and work in the US. In exchange, Micronesia, neighbouring Palau and the Marshall Islands grant the US exclusive military and defence access to their territorial waters – more than 2 million square miles of the Pacific that have been an essential element of Washington’s power projection in the region since World War II.
Much of China’s funding has been directed to Micronesia’s Chuuk state, which will in March vote in an independence referendum.
Although Chuuk is home to fewer than 50,000 people, its waters include one of the region’s deepest and most strategically appealing lagoons, creating extra incentive for Beijing and potential concern for Washington as the two countries
With a population of just 113,000 people, Micronesia relies on remittances sent home by citizens working in the US as well as the financial support from Washington under COFA. That assistance is scheduled to expire in 2023, creating uncertainty about the future of the relationship and making Chinese investment even more influential.
“Panuelo’s visit to China is a perfect example of how [the Chinese side] just needs to do a little to get a lot,” said Derek Grossman, senior analyst at Rand Corporation, a Washington think tank. “US$100 million is not very much for them and they can essentially loosen the screws [on COFA] with that.”
Micronesian President David Panuelo (second on left) and Chinese Premier Li Keqiang (right) during their talks in Beijing. Photo: EPA-EFE
The value of Micronesia’s bilateral trade with China has increased by nearly 30 per cent annually for the past five years, according to Micronesia’s Foreign Ministry. In 2017, the island nation signed onto President Xi’s signature Belt and Road Initiative which aims to build a vast network of strategic investment, trade routes and infrastructure projects across more than 150 countries.
US-China tech war’s new battleground: undersea internet cables14 Dec 2019
In recent years Chinese funding in Micronesia has built office and residential complexes for government officials, a showpiece new convention centre in the capital city Palikir, transport infrastructure and student exchanges, according to a recent report by Rand.
Jian Zhang, associate professor at UNSW Canberra at the Australian Defence Force Academy, said Beijing’s investment reflected a decision to cultivate broader, deeper ties.
Micronesian President David Panuelo during his meeting with Chinese officials in Beijing. Photo: EPA-EFE
“China’s interest in building the relationship with Micronesia is not just about its diplomatic rivalry with Taiwan or economic interests,” he said. “It has elevated the relationship to a comprehensive strategic partnership which encompasses all areas.”
During his recent visit, Panuelo described China as Micronesia’s top economic partner and the US as its top security partner. Pompeo’s visit to Micronesia highlights US anxiety about rising Chinese influence in Pacific 5 Aug 2019
Gerard Finin, professor of regional planning at Cornell University, who previously worked with the US Department of State in the Pacific, said: “China’s leadership consistently accords large ocean states the full protocol that is expected when a head of state visits.
“In contrast, Washington has only had a limited number of meetings and never hosted an official state visit to Washington for the leader of a Pacific Island nation,” said Finin.
US President Donald Trump in May hosted the leaders of Micronesia, Palau and the Marshall Islands together at the White House. When Mike Pompeo visited Micronesia
in August, he became the only sitting US secretary of state to have done so.
Pompeo said negotiations to update COFA had begun but no details have been made public. Micronesia has assembled a team to conduct the negotiations but the US has not, the Honolulu Civil Beat website reported.
US Secretary of State Mike Pompeo visited Micronesia in August. Photo: AFP
Breakaway vote could raise the stakes
Panuelo’s team met Micronesian students studying in China and representatives of state-owned China Railway Construction Corporation, which will build the roads in Chuuk, funded in part by US$50 million from Beijing. Construction of the Chuuk government complex was also funded by Beijing and the state’s governor joined Panuelo for his visit.
Should Chuuk vote to separate from Micronesia in March, it could also mean breaking from COFA, jeopardising the US work privileges of thousands of Chuukese and opening the state’s waters to other partners, particularly China.
Chuuk is home to one of the deepest lagoons in the Pacific, a geographic rarity of particular value in strategic military operations and submarine navigation.
US Coast Guard looks to bolster Pacific allegiances as Chinese clout grows
22 Oct 2019
Zhang said Beijing would explore any opportunity to build a port with potential military capability.
“China has a long-term need to gain a strategic foothold in the region,” Zhang said. “That is a key part of the Belt and Road Initiative. At the general level it’s an economic initiative but an important aspect of the maritime Silk Road is to develop a network of strategically located port facilities.”
Sabino Asor, chair of the public education committee for the Chuuk Political Status Commission, told Civil Beat seceding from Micronesia would be the best option for Chuuk’s future.
“There is no encouraging prospect if Chuuk remains within the Federation,” he said.
However, Patrick Buchan, at Washington think tank Centre for Strategic and International Studies, said Chuuk’s dependence on remittances from the US made breaking from COFA unlikely.
China courts Pacific island states in pursuit of ‘foothold’ as US risks losing influence
8 Aug 2019
In the meantime, uncertainty over COFA negotiations persists, although there is a chance it will be renewed with few changes.
“There is circulation with people easily coming and going that provides a level of understanding and friendship that does not exist between too many other countries,” Finin said.
However, China’s most attractive feature may be its willingness to at least discuss the most pressing concern of Pacific Island nations: climate change.
“When the Trump administration talks about how it doesn’t believe in climate change, or can’t even say the words – that is really offensive for Pacific nations,” Grossman said. “China knows that, and is taking full advantage of it.”
Chinese Foreign Minister Wang Yi wraps up tour of Brazil and Chile, as Colombian president heads for Beijing
Ecuador president tells US Secretary of State Mike Pompeo ‘smaller countries pay when the big ones fight’
Chinese Foreign Minister Wang Yi is greeted by an honour guard as he arrives at the Itamaraty Palace for a meeting with his Brazilian counterpart Ernesto Araujo on Thursday. Photo: AP
Latin American countries are caught in the middle of a geopolitical tug of war between Beijing and Washington as China boosts its ties in the region in a bid to counterbalance the effects of its trade war with the US.
China’s Foreign Minister Wang Yi wraps up a tour of Latin America on Sunday which began last week in Brazil and ended with an official visit to Chile. He returns to Beijing on the same day Colombia’s President Ivan Duque Marquez arrives for a three-day state visit to China which will include a meeting with Chinese President Xi Jinping.
Wang was in Brazil for the latest summit of foreign ministers from the BRICS countries – an association of emerging countries made up of Brazil, Russia, India, China and South Africa – as well as the third China-Brazil foreign ministers’ comprehensive strategic dialogue with Brazilian Foreign Minister Ernesto Araujo.
China has overtaken the US as Brazil’s largest trading partner, with Brazilian soybeans – one of the country’s biggest exports – and other agricultural products replacing American imports since the start of the US-China trade war a year ago.
Brazilian soybeans – one of the country’s biggest exports – and other farm products are being sold to China as a result of the trade war. Photo: Reuters
The growing importance of China to Brazil’s economy has created a difficult position for President Jair Bolsonaro, who accused Beijing of trying to buy Brazil during his election campaign, but changed tack on assuming office in January.
In March, Bolsonaro called China his country’s “main partner, politically as well as economically and commercially” and announced plans to travel to Beijing this year, a visit which was confirmed on Tuesday for late October.
China is now Latin America’s second largest trading partner with bilateral trade at US$307.4 billion, growing 18.9 per cent over the previous year, according to China’s ministry of commerce, in a relationship focused on commodity imports, including mining products like copper and energy, as well as soybeans and other agricultural goods.
While the US and China have tentatively agreed to resume talks in Shanghai next week, China and Latin American countries are likely to continue deepening their trade relations as production chains realign as a result of the trade war, according to Gustavo Oliveira, assistant professor of global and international studies at the University of California, Irvine.
“This means Chinese imports of Latin American agricultural and mineral commodities, and Latin American imports of Chinese manufactured products and hi-tech, might contribute to China’s ability to stand its ground against US pressure,” he said.
China in Latin America: partner or predator?
Oliveira said domestic contradictions in most Latin American countries complicated relations with China, as few leaders had the capacity to press or leverage China for much. “Unfortunately, therefore, most in this crop of Latin American leaders are basically placing themselves as junior partners or pawns in the geopolitical tug of war between the US and China.”
US Secretary of State Mike Pompeo put the pressure on Latin American countries over their relationship with China during his four-day tour of the region last weekend, when he visited Argentina, Ecuador, Mexico, and El Salvador.
In a joint interview with Pompeo during the visit, Ecuador’s new President Lenin Moreno defended the country’s China ties, and urged Washington and Beijing to resolve their conflicts for the benefit of other nations in the region.
“We hope that the US and China, the greatest powers in the world now, will find agreement easily because, unfortunately, when the big ones are discussing or fighting and have conflicts, the ones that are paying for all of that are the smaller countries,” he said.
“Now, when two elephants fight, the ones who lose are the insects who are of course being crushed by the elephants in the attempt to evade them.”
US Secretary of State Mike Pompeo (left) and Ecuadorian President Lenin Moreno hold a joint press conference during Pompeo’s tour of Latin America on July 20. Photo: EPA-EFE
Pompeo blasted China’s role in the region during a previous tour of South America in April, when he singled out Beijing’s support for President Nicolas Maduro of Venezuela. Maduro is backed by Beijing, Russia and other allies, while the US and many European countries have supported opposition leader Juan Guaido as legitimate president since elections in January.
Speaking from Chile on that tour, Pompeo said Beijing’s calls for non-intervention in Venezuela were “hypocritical” and aimed at protecting Beijing’s investments in the country, as well as debts owed to China by Venezuela.
Pompeo also accused Beijing of “sowing discord” in the region through debt traps. “When China does business in places like Latin America, it often injects corrosive capital into the economic bloodstream, giving life to corruption and eroding good governance,” he said.
Professor Cui Shoujun of Renmin University in Beijing said Washington’s concerns about “debt trap diplomacy” in Latin America reflected concerns that China’s growing involvement in financing infrastructure and development projects would make the region more pro-China.
“China’s interests in Latin America go beyond raw materials extraction,” he said. “The biggest point of tension between the US and China in the region is perhaps that China presents an alternative model for development that is very different from the Western model.”
‘Mr Pompeo, you can stop’: China hits back over Latin America criticism
While the US was drumming up tensions about China across the world, Beijing was not openly retaliating but responding with investment and trade for global partners, said Kevin Gallagher, researcher on China-Latin America ties, and professor at Boston University.
“The US points fingers and makes angry speeches in the region as China cuts investment deals and helps address infrastructure needs,” he said.
“Latin American countries’ governments are rightly keeping their heads down on the broader geopolitical winds, and are getting down to business with their largest trading partner.”
It said the economy had “performed within the reasonable range” in the first half of 2019 but that it faced “new downward pressure”.
While China watchers advise caution with Beijing’s official gross domestic product numbers, the data is seen as a useful indicator of the country’s growth trajectory.
Other data showed some signs of improvement in the world’s second largest economy.
Industrial production rose 6.3% in June from a year earlier, while retail sales rose 9.8% year-on-year – both above forecasts in Reuters polls.
Global impact
Slowing growth in China has raised concerns about the potential knock-on effect on the global economy.
Earlier this year Beijing announced plans to boost spending and cut billions of dollars in taxes in an effort to support the economy.
It has also moved to provide a liquidity boost by reducing the amount of cash banks must hold in reserve.
Edward Moya, senior market analyst at Oanda, said the latest economic data “shows the slowdown remains intact and markets should expect further stimulus” from China’s central bank later this year.
The US-led trade war is another factor weighing on growth.
“The trade war is having a huge impact on the Chinese economy, and with no end sight as trade negotiations struggle for meaningful progress, we are probably not near the bottom for China’s economy,” he said.
While both sides agreed to resume trade talks at a recent G20 summit in Japan, they have already placed tariffs on billions of dollars worth of one another’s goods, hurting businesses and casting a shadow over the world economy.
CHINDIA ALERT: You'll be living in their world, very soon 