Archive for ‘Washington’

15/06/2019

Lessons from an old trade war: China can learn from the Japan experience

  • In the last half of the 20th century US worries about a rising Japan led to tariffs and technology mistrust
  • Differences in the Chinese experience may predict a different outcome
Toshiba was one of the companies affected by US actions to prevent the rise of Japan in a trade war that echoes in today’s tensions between the US and China. Photo: Reuters
Toshiba was one of the companies affected by US actions to prevent the rise of Japan in a trade war that echoes in today’s tensions between the US and China. Photo: Reuters
If history is a mirror to the future, the similarities between the spiralling technology stand-off between China and the US and the economic wars waged by the US with Japan – which peaked in the 1980s and 1990s – may be instructive. But there are differences between the two which may predict a different outcome.
The US-Japan economic tensions started in the 1950s over textiles, extended to synthetic fibres and steel in the 1960s, and escalated – from the 1970s to 1990s – to colour televisions, cars and semiconductors, as Japan’s adjusted industrial policy and technology development moved it up the industrial chain.
Boosted by government support, Japan’s semiconductor industry surpassed the US as the world’s largest chip supplier in the early 1980s, causing wariness and discontent in the US over national security risks and its loss of competitiveness in core technologies.

The Reagan administration regarded Japan as the biggest economic threat to the US. Washington accused Tokyo of state-sponsored industrial policies, intellectual property theft from US companies, and of dumping products on the American market.

The US punished Japanese companies for allegedly stealing US technology and illegally selling military sensitive products to the Soviet Union. It also forced Japan to sign deals to share its semiconductor technologies and increase its purchases of US semiconductor products.

“The Trump administration is using similar tactics against China that were used against Japan in the 1980s and 1990s,” said an adviser to the Chinese government, on condition of anonymity, adding that the US was continuing its hegemony to curtail China’s tech development and was trying to mobilise its allies to follow suit.

After talks to end the US-China trade faltered last month, Huawei – a global leader in the 5G market – is now standing at centre stage of a protracted technology stand-off between Beijing and Washington, which has grown increasingly wary of the rising competitiveness of Chinese tech companies.

Zhang Monan, a researcher with the Beijing-based China Centre for International Economic Exchanges, does not foresee an easing of the rivalry between the US and China.

“The current US-China conflicts are more complicated than those between the US and Japan,” she said.

“The US will only get more intense in its containment of China and the tech rivalry won’t ease, even if China and the US could reach a deal to de-escalate the trade tensions.”

Huawei is at the centre of a technology stand-off between Beijing and Washington. Photo: AP
Huawei is at the centre of a technology stand-off between Beijing and Washington. Photo: AP

Back in 1982, the US justice department charged senior officials at Hitachi with conspiracy to steal confidential computer information from IBM and take it back to Japan. IBM also sued Hitachi. The two companies settled the case out of court and Hitachi paid 10 billion yen (US$92.3 million) to IBM in royalties in 1983, while accepting IBM inspections of its new software products for the next five years.

Toshiba, a major electronics producer in Japan, and Norway’s Kongsberg Vaapenfabrikk secretly sold sophisticated milling machines to the Soviet Union from 1982 to 1984, helping to make its submarines quieter and harder to detect. This transfer of sensitive military technology in the middle of an arms race between the US and the Soviet Union was not revealed until 1986.

The US issued a three-year ban on Toshiba products in 1987 and the company ran full-page advertisements in more than 90 American newspapers apologising for its actions.

In 1985, the US imposed 100 per cent tariffs on Japanese semiconductors. A year later, in its five-year semiconductor deal with the US, Japan agreed to monitor its export prices, increase imports from the US, and submit to inspections by the Office of the United States Trade Representative.

A display of chips designed by Huawei for 5G base stations on show at the China International Big Data Industry Expo. Photo: AP
A display of chips designed by Huawei for 5G base stations on show at the China International Big Data Industry Expo. Photo: AP

This was followed by a second five-year semiconductor deal in 1991, in which Japan agreed to double the US market share in Japan to 20 per cent. In yet another bilateral semiconductor deal in 1989 Japan was required to open its semiconductor patents to the US.

Meanwhile, the US government boosted its efforts to help American businesses cement their industrial leverage in the chip sector and unveiled rules to protect its domestic chip industry.

The two countries were irreconcilable in 1996 on how to measure their respective market share. Overall market circumstances had also changed by then, with the US becoming competitive in microprocessing, and South Korea and Taiwan emerging as strong rivals to Japan.

Its dominance in semiconductors lost, Japan reached out to Europe for a range of cooperative technology deals.

Cooperate, don’t confront: academic advises Beijing on trade war tactics

“History can tell that high technology matters greatly to national security strategies. It is not a process of mere market competition. It follows the law of the jungle,” Zhang said.

The US has intensified its investment scrutiny by rolling out the Foreign Investment Risk Review Modernisation Act last year, which extends the regulation to key industrial technology sectors.

Zhang predicted the US would continue to contain China’s technological development in key sectors such as AI, aerospace, robots and nanotechnology – all of which are of great importance to Beijing.

The US has said Chinese tech giants Huawei and ZTE present a national security risk. Last April it cut US supplies to ZTE, citing violations of sanctions against Iran and North Korea. The ban was removed three months later after ZTE paid US$1.4 billion in fines.

It was a wake-up call for China to develop its own core technologies. The subsequent US ban on Huawei added to the urgency to do so, observers said.

Wang Yiwei, a professor in international relations with Renmin University, said China had to develop its own hi-tech know-how while continuing the opening up process.

“China has paid a price to learn whose globalisation it is,” he said.

“We may see some extent of disengagement with the US in technology and dual-use sectors, but China can speed up cooperation with European countries, and other countries such as Israel, to offset the risks from the US.”

In December, the US filed criminal charges against Huawei and its chief financial officer Sabrina Meng Wanzhou, alleging bank fraud, obstruction of justice and technology theft.

The squeeze continued last month with the US blacklisting Huawei, restricting its access to American hi-tech supplies and putting pressure on its allies to freeze the company out of the 5G market. So far, those allies, including Germany and Japan, have remained hesitant about meeting the US request and refrained from siding with either country.

Chinese foreign ministry spokesman Geng Shuang said on Monday that Huawei had obtained 46 commercial contracts in 30 countries as of June 6, “including some US allies and some European countries that the US has been working hard to persuade out of the contracts”.

For Zhang, the differences between Japan’s experience of US concerns of technological advancement and China’s may offer some hope for Chinese ambitions.

“Dependent on US for security protection, Japan was limited in [its ability to] push back and was already a developed country,” she said.

“But China has huge domestic market potential to address the imbalance [between] economic and technology development. This remains a big attraction to multinational companies, which would enable China to integrate into global innovation and technology cooperation, but China has to figure out how to dispel the doubts on its growth model.”

Source: SCMP

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12/06/2019

China to send defence minister to Singapore security conference as tensions with US rise

  • Observers will be watching to see if General Wei Fenghe holds talks with his American counterpart
  • Forum comes as Beijing and Washington are at odds over issues ranging from security to trade
General Wei Fenghe will be the first Chinese defence minister to attend the Shangri-La Dialogue in eight years. Photo: Reuters
General Wei Fenghe will be the first Chinese defence minister to attend the Shangri-La Dialogue in eight years. Photo: Reuters
China is sending its defence minister to a leading Asian security forum next week, the first time in eight years that a high-ranking Chinese general will represent the country at the conference.
General Wei Fenghe, a State Councillor and China’s defence minister, will speak at the three-day Shangri-La Dialogue in Singapore, a gathering that comes as Beijing and Washington are at odds over issues ranging from security to trade.
“In a highly anticipated speech, General Wei Fenghe will speak on China’s role in the Indo-Pacific at a pivotal time for the region,” the International Institute for Strategic Studies, an organiser of the conference, said on Monday night.

Chinese military sources said that Wei would lead a “relatively big” delegation to the gathering, which starts on May 31 and is co-organised by the Singaporean government.

South China Sea stand-offs ‘a contest of wills’
The last time Beijing sent a high-ranking officer to the event was in 2011 when General Liang Guanglie, then the defence minister, attended.
Acting US secretary of defence Patrick Shanahan will also attend the conference and deliver a speech.
The spoils of trade war: Asia’s winners and losers in US-China clash

Beijing-based military specialist Zhou Chenming said observers would be watching to see whether the two senior defence officials held talks.

“The whole world will keep a close eye on any possible encounters between the Chinese and the Americans … At least now China has shown its sincerity in sending Wei to attend the conference, who is of equal standing as Shanahan, if the latter is willing to hold talks with him in good faith,” Zhou said.

But he said a meeting between Wei and Shanahan would be difficult because of the current distance between Beijing and Washington on major issues.

How Trump’s tweets bested China in the trade war publicity battle

“It’s not realistic to expect they will make a breakthrough because both sides will just sound their own bugles. The … mistrust between China and the US is actually growing every day,” Zhou said.

Just on Sunday, the USS Preble, an Arleigh Burke-class guided missile destroyer, sailed within 12 nautical miles of the Scarborough Shoal, an area in the South China Sea claimed by both China and the Philippines.

The 

Chinese foreign ministry responded on Monday

by strongly urging “the US to stop such provocative actions” and saying it would “take all necessary measures” to protect its “national sovereignty”.

Military analysts said the size of the Chinese delegation at the conference would underscore the importance of the People’s Liberation Army (PLA) attached to the event this year.
One military insider said the delegation would also include Lieutenant General He Lei, former vice-president of the Academy of Military Science, who headed China’s delegation in 2017 and 2018; and Senior Colonel Zhou Bo, director of the defence ministry’s Centre for Security Cooperation. In addition, the PLA would send a number of Chinese academics to speak at various sessions of the forum.
China tries to go one on one with Malaysia to settle South China Sea disputes

Singaporean Prime Minister Lee Hsien Loong will deliver a keynote speech on the opening day of the annual dialogue.

Japan and South Korea are also sending their defence ministers, according to a report by The Korean Times on Tuesday. The report also said South Korean Defence Minister Jeong Kyeong-doo was keen to hold one-on-one meetings with his Chinese and Japanese counterparts on the sidelines of the conference.

Source: SCMP

11/06/2019

Washington and Beijing in ‘contest of wills’ in South China Sea

  • Latest US mission in disputed waters may prompt China to step up its countermeasures
The USS Preble. Photo: Handout
The USS Preble. Photo: Handout
China and the United States have entered a “contest of wills” in the South China Sea, according to analysts.
The assessment follows the latest passage of a US warship through disputed waters near the Scarborough Shoal on Sunday.

It was the second such incident this month and follows a number of missions earlier this year, as the US seeks to challenge China’s activities in the South China Sea.

But analysts predicted that China would step up its countermeasures to show that it would not compromise on sovereignty. However, Beijing and Washington appear to have kept communication channels open to avoid military miscalculations.

Lieutenant Commander Tim Gorman of the US Pacific Fleet defended Sunday’s mission, which saw the USS Preble passing within 12 nautical miles of Scarborough Shoal, an area claimed by both China and the Philippines.

Gorman said the mission was designed “to challenge excessive maritime claims and preserve access to the waterways as governed by international law”.

“All operations are designed in accordance with international law and demonstrate that the United States will fly, sail and operate wherever international law allows,” he continued.

“We conduct routine and regular freedom of navigation operations (FONOPs) as we have done in the past and will continue to in the future. FONOPs are not about any one country, nor are they about making political statements.”

The US is known to have conducted four freedom of navigation operations this year – one in the Paracel Islands and three in the Spratley chain. It carried out seven last year and six in 2016, according to the Pentagon.

‘Divide and conquer Asean’: China tries to go one on one with Malaysia to settle South China Sea disputes
China’s Southern Theatre Command issued a strong response to the latest incident, saying it endangered the ships and personnel of both sides, undermined China’s sovereignty and security, violated basic norms and undermined regional peace and stability.
Senior Colonel Li Huamin, a spokesman for Southern Theatre Command, said its troops would be kept on high alert and take all necessary measures to resolutely safeguard China’s sovereignty and security.
Washington has also urged its allies to help it to counter China’s activities in the region, where it is accused of building up its military infrastructure, and so far this year the US has conducted join exercises with Britain, the Philippines, Japan and India.
The past 12 months have also seen French and British warships sailing through the Taiwan Strait and Paracel Islands respectively.
US and Philippine coastguard vessels during a joint operation near the Scarborough Shoal. Photo: AFP
US and Philippine coastguard vessels during a joint operation near the Scarborough Shoal. Photo: AFP

Collin Koh, a maritime security expert at Nanyang Technological University in Singapore, said the US and China were now engaged in a “contest of wills” but “weren’t keen to come to blows considering their mutual interdependence”.

He also said the US military was keen to publicise its operations to “normalise them”, adding: “My sense is that the US side seeks to enhance strategic communication to the wider international community about these operations, and which would also become ‘visible’ to the regional governments as a form of strategic assurance.”

Song Zhongping, a Hong Kong-based military analyst, agreed that “the US has normalised the FONOPs to repeatedly provoke China, which won’t stop”.

He continued: “China should step up its countermeasures to let the US know that Beijing won’t make any concessions on its maritime sovereign claims.”

Song also argued that China also needed to strengthen its coastguard’s capability and the navy and air force’s ability to fight away from China’s coastline.

US naval chief says ‘freedom of navigation’ exercises in South China Sea get more attention than they deserve

Shi Yinhong, an international relations professor specialising in US studies, said US President Donald Trump’s administration “has already greatly increased the frequency and intensity of US FONOPs in the past two years”.

Shi added that this situation “had become or was becoming the new normal” and China was “having to restrain itself a little” to prevent the risk of conflict.

However, he said the country’s programme to reclaim land and step up its military capabilities in the waters had given it “real military advantages” that the US “cannot change by an inch”.

But the US and China have continued their mutual dialogue.

Koh noted that both Chinese Defence Minister Wei Fenghe would be attending the Shangri-La Dialogue in Singapore, an event senior Chinese officials have skipped in recent years.

Wei’s US counterpart, Patrick Shanahan, will also be there and “this could mean that both sides wish to maintain channels of communications to manage their rivalry”, Koh said.

Source: SCMP

10/06/2019

Why China struggles to win friends and make itself heard

  • Beijing has to reconcile the competing needs to appear tough to the Chinese public and conciliatory to an international audience
  • China feels US has long had the advantage in shaping global opinion but it now needs to make itself heard
China must appear tough for an increasingly nationalistic audience at home and be conciliatory to an international audience wary of China’s assertive foreign and defence policy. Photo: Xinhua
China must appear tough for an increasingly nationalistic audience at home and be conciliatory to an international audience wary of China’s assertive foreign and defence policy. Photo: Xinhua
In just the last week, a Chinese official posed a question that would resonate among his fellow cadres: as China rises, why are we not making more friends and why are our voices not heard?
The question has gained weight as the trade war with the United States has deepened, and Chinese officials have scrambled to win the battle of public opinion at home and abroad.
It also came to the fore at the annual Shangri-La Dialogue security forum in Singapore on the weekend, when Chinese officials were faced with balancing the need to appear tough for an increasingly nationalistic audience at home and being conciliatory to an international audience wary of China’s assertive foreign and defence policy.
Senior Colonel Zhao Xiaozhuo, a senior fellow at the People’s Liberation Army’s Academy of Military Sciences and a public diplomacy veteran for the military, said the expectations clashed in Singapore.
“Currently there are two parallel worlds in the public opinion landscape, one domestic and another international, and the two of them are basically split and in two extremes,” Zhao said.
“[The Shangri-La Dialogue] is a place where the two worlds clash. As the Chinese delegation [at the forum] we need to show our position, but it is becoming more difficult to balance [the expectations of the two sides].
“If you are tough, the domestic audience will be satisfied, but it won’t bode well with the international audience. But if we appear to be soft, we will be the target of overwhelming criticism at home.”
China asks state media to pick battles carefully with long US trade war looming, sources say

Zhao said this was an unprecedented challenge for Chinese cadres, who must also satisfy the expectations of the leadership.

“Our task was about diplomacy and making friends. But [with the tough position] you may not be able to make friends, and might even exacerbate the tension,” he said.

The pressure was immense when Chinese Defence Minister General Wei Fenghe took to the stage on Sunday in a rare appearance at the forum. Concerned about how Wei’s performance would be received at home, Beijing ordered Chinese media to minimise their coverage of acting US defence secretary Patrick Shanahan’s address in case it made China appear weak, according to a source familiar with the arrangements for Chinese media.

In his speech, Wei struck a defiant tone, vowing that the PLA would “fight at all costs” for “reunification” with Taiwan and that China was ready to fight the US to the end on the trade front.

Chinese Defence Minister Wei Fenghe makes a rare appearance at the Shangri-La Dialogue in Singapore. Photo: Reuters
Chinese Defence Minister Wei Fenghe makes a rare appearance at the Shangri-La Dialogue in Singapore. Photo: Reuters

Major General Jin Yinan, from the PLA’s National Defence University, a member of the Chinese delegation to the Singapore summit, said Wei’s speech defied expectations that China would show restraint with the US, and demonstrated China’s confidence on the world stage.

The public response at home was immediate and positive. Tens of thousands of Chinese internet users flooded social media platforms such as the Twitter-like Weibo service to express their approval for Wei’s hard line.

“This is the attitude that the Chinese military should show to the world,” one commenter said.

“I am proud of my country for being so strong and powerful,” another said.

Over the past year, Beijing’s propaganda apparatus has tightly controlled the domestic media narrative on the trade war, barring independent reporting on the tensions. But since the breakdown of trade talks in early May, the authorities have gone one step further by escalating nationalistic rhetoric in newspapers and on television.

How Donald Trump’s tweets outgunned China’s heavy media weapons in the trade war publicity battle

China has also tried to make its case to the world with an official statement. On the same day that Wei addressed the gathering in Singapore, the State Council, China’s cabinet, put China’s side of the dispute in a white paper, saying the US should bear responsibility for the breakdown of the trade talks.

A Chinese delegate at the forum said Beijing felt Washington had long had the advantage in shaping global opinion and there was an urgent need for China to make itself heard.

“We should get more used to voicing our position through Western platforms. The US has been criticising us on many issues. But why should the Americans dominate all the platforms and have the final say over everything?” the delegate said.

Before Wei’s appearance at the dialogue, China had not sent such a high-ranking official for eight years. It had long sought to play down the importance of the forum, seeing it as a platform wielded by the US and its Western allies to attack China.

In 2002, China set up the Beijing Xiangshan Forum to rival the Singapore gathering and amplify its voice on security issues.

But Chinese officials are well aware that Xiangshan does not have the same impact and profile as the Shangri-La Dialogue, according to Collin Koh, a research fellow at the S. Rajaratnam School of International Studies at Nanyang Technological University in Singapore.

“[At the same time, the long absence of high-level Chinese representation to the Shangri-La Dialogue also] raises the question of whether it might be sustainable in the long run for [the dialogue] if they continue to not have such ministerial representation [from China],” Koh said.

Zhao, who is also the director of the Xiangshan forum’s secretariat office, agreed that China lagged the US in promoting the image of the military and in winning public opinion.

“China has not fought a war in 30 years. We have only built some islands in the South China Sea and yet have received so much criticism from the international media. The US has engaged in many wars but they are seldom criticised. This reflects that China is in a disadvantaged position in international discourse,” he said.

Expectations collided at the Shangri-La Dialogue in Singapore this month. Photo: AFP
Expectations collided at the Shangri-La Dialogue in Singapore this month. Photo: AFP
In a rare conciliatory gesture – and just days before the 30th anniversary of the crackdown on pro-democracy protesters in Tiananmen Square – Wei took questions from a room of international delegates on a range of sensitive issues, including the crackdown and China’s mass internment camps in Xinjiang. While he largely toed the official line in his reply, his presence at the forum and willingness to address the questions raised hopes that China would become a more responsible partner in global affairs despite its continuing disputes with the US.
Andrea Thompson, US undersecretary of state for arms control and international security, said Wei’s attendance at the Singapore gathering was a “positive sign” and she hoped that China would be more open and transparent in addressing issues such as arms control and cybersecurity.
“I appreciate that he is here. I think it’s important to have a dialogue … There will be areas where we will agree, and some areas where we disagree, but you still have to have dialogue,” Thompson said.
Source: SCMP
04/06/2019

China’s lunar rover Yutu ends 60-year riddle of moon’s mantle with discovery of mineral olivine

  • Yutu’s discovery of olivine helps pave the way for scientists to confirm existence of a mantle beneath the moon’s crust
  • Crystallised mineral likely came from a crater caused by a meteor strike
China’s lunar rover, Yutu, has made a groundbreaking discovery. Photo: Xinhua
China’s lunar rover, Yutu, has made a groundbreaking discovery. Photo: Xinhua
China’s lunar rover, Yutu, has made a groundbreaking discovery that proves what scientists have been thinking for decades: that the moon has a mantle.
Scientists have long suspected that the moon has a mantle under its crust, just like the Earth, but for the past 60 years lunar explorations, including the US Apollo missions, have failed to provide proof. While there were clues, there was no direct evidence.
“Now we have it,” said Professor Li Chunlai, deputy director of the National Astronomical Observatory of China and a lead scientist on the Chang’e-4 mission that put Yutu, or Jade Rabbit as it is known in English, on the moon.
The findings, published in the latest issue of journal Nature on Thursday, answer some fundamental questions about the moon, such as its internal structure and history of its formation.
The rover discovered olivine in surface samples collected near its landing site. Photo: Xinhua
The rover discovered olivine in surface samples collected near its landing site. Photo: Xinhua

During its first mission on January 3, Yutu discovered olivine, a green, crystallised mineral usually found deep underground – like the upper mantle of the Earth – in surface samples collected near its landing site.

Further analysis showed that the olivine was not local, but had originated from a 72km diameter (45-mile) crater nearby.

The far side of the moon has more craters than the near side, which faces the Earth, and a meteor strike probably penetrated to the mantle and brought up materials to the surface.

What you need to know about Chang’e 4’s mission to the moon
Yutu’s landing site used to be littered by rocks, but cosmic rays and solar wind weathered them to dust, Li said.

“What we found is the first direct evidence of materials from deep below the lunar crust,” though how deep is still unknown, he said.

It is generally believed that the moon was once covered by oceans of molten rock. Lighter substances rose to the surface and formed a crust while heavier ones sank to form the mantle and core. The new findings support that theory.

China is the first country to land a rover on the far side on the moon and is planning to send a larger spacecraft there later this year to bring back samples.

The first Chinese astronauts will land on the moon between 2025 to 2030, according to Beijing’s latest schedule.

The Apollo missions brought back many rock samples, some of which contained olivine, but some scientists suspected they might have come from a volcanic eruption.

First photo of lunar rover leaving ‘footprints’ on moon

China, the United States and other nations have all announced plans to launch missions to exploit the moon’s resources within the next decade or two.

Yutu’s discovery could help scientists to draw a more accurate map of those resources, including the volume and distribution of minerals, researchers said.

In Chinese folklore, Yutu or Jade Rabbit as it is known in English, is a companion of the moon goddess Chang’e. Photo: Handout
In Chinese folklore, Yutu or Jade Rabbit as it is known in English, is a companion of the moon goddess Chang’e. Photo: Handout

US President Donald Trump gave Nasa an additional US$1.6 billion budget to put Americans back on the moon by 2024.

Li said Chinese scientists were willing to work with their colleagues in the US, but Washington had blocked any such collaboration.

“Our door remains open,” he said.

Source: SCMP

29/05/2019

China looks to Russia, Central Asia for support amid tensions with US

  • President Xi Jinping will meet Russian counterpart Vladimir Putin next month and address economic summit in St Petersburg
  • Diplomatic flurry will also include regional security forums in Kyrgyzstan and Tajikistan
Xi Jinping has met Vladimir Putin more times than any other foreign leader since he took power in 2013. Photo: AFP
Xi Jinping has met Vladimir Putin more times than any other foreign leader since he took power in 2013. Photo: AFP
Beijing is stepping up efforts to seek support from regional and global players such as Russia and Central Asian nations as its geostrategic rivalry with Washington heats up.

President Xi Jinping is expected to meet his Russian counterpart Vladimir Putin next month, when he will also address the St Petersburg International Economic Summit,

Russian presidential aide Yuri Ushakov told state-run TASS news agency earlier.

The Chinese president will also visit the Kyrgyzstan capital Bishkek for the Shanghai Cooperation Organisation (SCO) summit in June, as well as another regional security forum in Dushanbe, Tajikistan.

Meanwhile, Vice-President Wang Qishan is visiting Pakistan before he heads to the Netherlands and Germany, according to the Chinese foreign ministry.
Pakistani Prime Minister Imran Khan meets Chinese Vice-President Wang Qishan in Islamabad on Sunday. Photo: AFP
Pakistani Prime Minister Imran Khan meets Chinese Vice-President Wang Qishan in Islamabad on Sunday. Photo: AFP
The latest flurry of diplomatic activity comes as competition between China and the US intensifies on several fronts including trade and technology, the South China Sea and the Arctic, where Beijing’s partnership with Moscow –

funding and building ports, berths and icebreakers off Russia’s shores

– has drawn criticism from Washington.

It will be Xi’s second time at the St Petersburg forum, and observers expect the Chinese leader will reaffirm Beijing’s commitment to multilateralism and promote the nation as a champion of openness and cooperation.
China-Russia ties unrivalled, Beijing warns before Pompeo meets Putin
It will also be his second meeting with Putin in two months, after talks on the sidelines of the Belt and Road Forum in Beijing in late April, when the Russian president

offered his support

for the controversial China-led infrastructure and investment initiative.

With China and Russia edging closer, the latest meeting is likely to see efforts to coordinate their strategies on a range of issues – including Venezuela, North Korea, nuclear weapons and arms control, according to observers. Xi has met Putin more times than any other foreign leader since he took power in 2013.

“This time it is very likely that the latest anti-China moves by the US, such as new tariffs and the Huawei ban, will feature prominently in their conversations,” said Artyom Lukin, an associate professor at Far Eastern Federal University in Vladivostok.

Lukin said Russia’s stagnating economy and sanctions imposed by the West limited its role as a substitute for the foreign markets and technologies China could lose access to because of the US crusade. But he said Putin would “provide political and moral support to Xi”.

“That is also significant as Russia has been withstanding intense US-led sanctions pressure for more than five years already,” Lukin said, referring to sanctions imposed after Russia’s annexation of Crimea in 2014.

Xi and Putin are also expected to talk about Venezuela, where US-backed opposition leader Juan Guaido is attempting to oust socialist President Nicolas Maduro, who has the support of China and Russia.

Venezuelan President Nicolas Maduro has the backing of China and Russia. Photo: AP
Venezuelan President Nicolas Maduro has the backing of China and Russia. Photo: AP

“Moscow and Beijing are not able to seriously hurt Washington by raising tariffs or denying access to high technology. However, there are plenty of areas where coordinated Sino-Russian policies can damage US interests in the short term or in the long run,” Lukin said. “For example, Moscow and Beijing could intensify their joint support for the Venezuelan government of Nicolas Maduro, frustrating Washington’s efforts to dislodge him.”

China and Russia would also be seeking to boost economic ties. Bilateral trade, dominated by Chinese imports of gas and oil, reached US$108 billion last year – falling far short of the target set in 2011 by Xi’s predecessor, Hu Jintao, of US$200 billion by 2020.

China and Russia to forge stronger Eurasian economic ties

Li Lifan, an associate research professor at the Shanghai Academy of Social Sciences, said bilateral trade was a sticking point. “This is one of the potential hindrances in China-Russia relations and Beijing is hoping to [address this] … in the face of a possible global economic slowdown,” Li said.

Given the escalating trade war with Washington, he said China would seek to diversify its investments and markets to other parts of the world, particularly Russia and Europe.

“China will step up its investment cooperation with Europe and Russia and focus more on multilateral investment,” Li said.

But Beijing was not expected to do anything to worsen tensions with Washington.

“China is currently taking a very cautious approach towards the US, trying to avoid heating up the confrontation and further aggravation of the situation,” said Danil Bochkov, a contributing author with the Russian International Affairs Council. “For China it is important to demonstrate that it has a reliable friend – Russia – but that should not be done in an openly provocative manner.”

Stephen Blank, a senior fellow at the American Foreign Policy Council in Washington, said Beijing and Moscow would also seek to contain US influence “as far as possible” from Central Asia, where China has increased its engagement through infrastructure building under the “Belt and Road Initiative”.

Leaders from the region will gather in Bishkek next month for the SCO summit, a security bloc set up in 2001 that now comprises China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, India and Pakistan. Those members account for about 23 per cent of the world’s land mass, 45 per cent of its population, and 25 per cent of global GDP.

Newly re-elected Indian Prime Minister Narendra Modi could meet the Chinese president for talks in Bishkek next month. Photo: EPA-EFE
Newly re-elected Indian Prime Minister Narendra Modi could meet the Chinese president for talks in Bishkek next month. Photo: EPA-EFE

There is growing speculation that Xi will meet newly re-elected Indian Prime Minister Narendra Modi on the sidelines of that summit.

Independent analyst and author Namrata Goswami said India would be seeking a commitment to a WTO-led and rules-based multilateral trading system during the SCO talks.

“This is interesting and significant given the current US tendencies under President Donald Trump focused on ‘America first’ and the US-China trade war,” Goswami said.

Counterterrorism will again be a top priority at the SCO summit, amid concerns among member states about the rising number of Islamic State fighters returning from Syria and Iraq. Chinese scholars estimated last year that around 30,000 jihadists who had fought in Syria had gone back to their home countries, including China.

Alexander Bortnikov, chief of the main Russian intelligence agency FSB, said earlier that 5,000 fighters from a group affiliated with Isis had gathered in areas bordering former Soviet states in Central Asia, saying most of them had fought alongside Isis in Syria.

War-torn Afghanistan, which shares a border with four SCO member states – China, Pakistan, Tajikistan and Uzbekistan – is also likely to be high on the agenda at the Bishkek summit.

“With the Trump administration drafting plans to withdraw troops from Afghanistan, the SCO will assess the security situation there and decide whether to provide training for Afghan troops,” Li said.

Eva Seiwert, a doctoral candidate at the Free University of Berlin, expected the security bloc would also discuss Iran after the US withdrew from the 2015 nuclear deal and ordered new sanctions against the country.

Iran, which has observer status with the SCO, was blocked from becoming a full member in 2008 because it was subject to UN sanctions at the time. But its membership application could again be up for discussion.

Iran presses China and Russia to save nuclear deal

“The Trump administration’s unilateral withdrawal from the Iran nuclear deal in 2018 made it easy for China and Russia to present themselves as the proponents of peaceful settlement of conflicts,” Seiwert said. “Discussing the possibility of admitting Iran as a full member state would help the SCO members demonstrate their support of multilateral and peaceful cooperation.

“This would be a strong signal to the US and enhance the SCO’s standing in the international community,” she said.

Kyrgyz President Sooronbay Jeenbekov (right) meets Chinese Foreign Minister Wang Yi in Bishkek on Tuesday last week. Photo: Xinhua
Kyrgyz President Sooronbay Jeenbekov (right) meets Chinese Foreign Minister Wang Yi in Bishkek on Tuesday last week. Photo: Xinhua

As well as security, Xi’s visit to Central Asia is also likely to focus on economic ties. Meeting Kyrgyz President Sooronbay Jeenbekov in Bishkek last week, Chinese Foreign Minister Wang Yi said Beijing would continue to “provide support and help national development and construction in Kyrgyzstan”.

Li said China may increase investment in the Central Asian region, especially in greenfield projects.

“China will continue to buy agriculture products from Central Asia, such as cherries from Uzbekistan, and build hydropower projects to meet local energy demand,” Li said. “Investment in solar and wind energy projects is also expected to increase too.”

Source: SCMP

29/05/2019

Short of war, US can’t help but lose to China’s rise in Asia, says think tank Lowy Institute

  • Lowy Institute’s 2019 Asia Power Index puts Washington behind both Beijing and Tokyo for diplomatic influence
  • Trump’s assault on trade has done little to stop Washington’s decline in regional influence, compared to Beijing, say experts
Chinese and US flags at an international school in Beijing. Photo: AFP
Chinese and US flags at an international school in Beijing. Photo: AFP
The 
United States

may be a dominant military force in Asia for now but short of going to war, it will be unable to stop its economic and diplomatic clout from declining relative to China’s power.

That’s the view of Australian think tank the Lowy Institute, which on Tuesday evening released its 2019 index on the distribution of power in Asia.

However, the institute also said China faced its own obstacles in the region, and that its ambitions would be constrained by a lack of trust from its neighbours.

The index scored China 75.9 out of 100, just behind the US, on 84.5. The gap was less than America’s 10 point lead last year, when the index was released for the first time.
“Current US foreign policy may be accelerating this trend,” said the institute, which contended that “under most scenarios, short of war, the United States is unlikely to halt the narrowing power differential between itself and China”.
The Lowy Institute’s Asia Power Index. Click to enlarge.
The Lowy Institute’s Asia Power Index. Click to enlarge.
Since July, US President

Donald Trump

has slapped tariffs on Chinese imports to reduce his country’s

trade deficit with China

. He most recently hiked a 10 per cent levy on US$200 billion worth of Chinese goods to 25 per cent and has also threatened to impose tariffs on other trading partners such as the European Union and Japan.

Herve Lemahieu, the director of the Lowy Institute’s Asian Power and Diplomacy programme, said: “The Trump administration’s focus on trade wars and balancing trade flows one country at a time has done little to reverse the relative decline of the United States, and carries significant collateral risk for third countries, including key allies of the United States.”

The index rates a nation’s power – which it defines as the ability to direct or influence choices of both state and non-state actors – using eight criteria. These include a country’s defence networks, economic relationships, future resources and military capability.

It ranked Washington behind both Beijing and Tokyo in terms of diplomatic influence in Asia, due in part to “contradictions” between its recent economic agenda and its traditional role of offering consensus-based leadership.

The spoils of trade war: Asia’s winners and losers in US-China clash

Toshihiro Nakayama, a fellow at the Wilson Centre in Washington, said the US had become its own enemy in terms of influence.

“I don’t see the US being overwhelmed by China in terms of sheer power,” said Nakayama. “It’s whether America is willing to maintain its internationalist outlook.”

But John Lee, a senior fellow at the Hudson Institute, said the Trump administration’s willingness to challenge the status quo on issues like trade could ultimately boost US standing in Asia.

“The current administration is disruptive but has earned respect for taking on difficult challenges which are of high regional concern but were largely ignored by the Obama administration – 

North Korea’s

illegal weapons and China’s predatory economic policies to name two,” said Lee.

“One’s diplomatic standing is not just about being ‘liked’ or ‘uncontroversial’ but being seen as a constructive presence.”
CHINA’S RISE
China’s move up the index overall – from 74.5 last year to 75.9 this year – was partly due to it overtaking the US on the criteria of “economic resources”, which encompasses GDP size, international leverage and technology.
China’s economy grew by more than the size of Australia’s GDP in 2018, the report noted, arguing that its growing base of upper-middle class consumers would blunt the impact of US efforts to restrict Chinese tech firms in Western markets.
US President Donald Trump with Chinese counterpart Xi Jinping. Photo: Reuters
US President Donald Trump with Chinese counterpart Xi Jinping. Photo: Reuters

“In midstream products such as smartphones and with regard to developing country markets, Chinese tech companies can still be competitive and profitable due to their economies of scale and price competitiveness,” said Jingdong Yuan, an associate professor at the China Studies Centre at the University of Sydney.

“However, to become a true superpower in the tech sector and dominate the global market remains a steep climb for China, and the Trump administration is making it all the more difficult.”

The future competitiveness of Beijing’s military, currently a distant second to Washington’s, will depend on long-term political will, according to the report, which noted that China already spends over 50 per cent more on defence than the 10 

Asean

economies,

India

and

Japan

combined.

TRUST ISSUE
However, 
distrust of China

stands in the way of its primacy in Asia, according to the index, which noted Beijing’s unresolved territorial and historical disputes with 11 neighbouring countries and “growing degrees of opposition” to its signature

Belt and Road Initiative

.

Beijing is locked in disputes in the

South China Sea

with a raft of countries including Vietnam, the Philippines and Brunei, and has been forced to renegotiate infrastructure projects in

Malaysia

and Myanmar due to concerns over feasibility and cost.

If Trump kills off Huawei, do Asia’s 5G dreams die?
Xin Qiang, a professor at the Centre for American Studies at Fudan University in Shanghai, said Beijing still needed to persuade its neighbours it could be a “constructive, instead of a detrimental, force for the region”.
“There are still many challenges for [China to increase its] power and influence in the Asia-Pacific,” Xin said.
Wu Xinbo, also at Fudan University’s Centre for American Studies, said Beijing was having mixed success in terms of winning regional friends and allies.
“For China, the key challenge is how to manage the maritime disputes with its neighbours,” said Wu. “I don’t think there is growing opposition to the Belt and Road Initiative from the region, actually more and more countries are jumping aboard. It is the US that is intensifying its opposition to the project as Washington worries it may promote China’s geopolitical influence.”
Yuan said the rivalry between the

US and China

would persist and shape the global order into the distant future.

“They can still and do wish to cooperate where both find it mutually beneficial, but I think the more important task for now and for some time to come, is to manage their disputes in ways that do not escalate to a dangerous level,” Yuan said. “These differences probably cannot be resolved given their divergent interests, perspectives, etc, but they can and should be managed, simply because their issues are not confined to the bilateral [relationship] but have enormous regional and global implications.”
Elsewhere in Asia, the report spotlighted Japan, ranked third in the index, as the leader of the liberal order in Asia, and fourth-placed India as an “underachiever relative to both its size and potential”.
China’s wrong, the US can kill off Huawei. But here’s why it won’t
Lee said the index supported a growing perception that Tokyo had emerged as a “political and strategic leader among democracies in Asia” under

Shinzo Abe

.

“This is important because Prime Minister Abe wants Japan to emerge as a constructive strategic player in the Indo-Pacific and high diplomatic standing is important to that end,” Lee said.

Russia

, South Korea, Australia,

Singapore

, Malaysia and Thailand rounded out the top-10 most powerful countries, in that order. Among the pack, Russia, Malaysia and Thailand stood out as nations that improved their standing from the previous year.

Taiwan

, ranked 14th, was the only place to record an overall decline in score, reflecting its waning diplomatic influence

after losing three of its few remaining diplomatic allies

during the past year.

Source: SCMP
28/05/2019

Taiwan changes name of de facto embassy in United States to ‘reflect stronger ties’

  • Coordination Council for North American Affairs becomes Taiwan Council for US Affairs, island’s foreign ministry says
  • Move signifies ‘firm and close relationship between Taiwan and the US’, President Tsai Ing-wen says
Taiwan has changed the name of its de facto embassy in the United States to better reflect ever-improving ties between the sides. Photo: EPA
Taiwan has changed the name of its de facto embassy in the United States to better reflect ever-improving ties between the sides. Photo: EPA
Taiwan has changed the name of its de facto embassy in the United States to better reflect relations between the sides, which are at their strongest in decades, Taipei said on Saturday.
Once the necessary formalities have been completed, the agency formerly known as the Coordination Council for North American Affairs will be called the Taiwan Council for US Affairs, the island’s foreign ministry said.
“The new name better reflects the [agency’s] role in coordinating US-Taiwan affairs. It also symbolises the close and amicable relations between Taiwan and the United States,” it said.
Observers said the name change was significant as it appeared to drop the pretence that the council was non-diplomatic or political in nature.
The name change was possible because of the consensus between Taiwan and the US. Photo: CNA
The name change was possible because of the consensus between Taiwan and the US. Photo: CNA

Although Washington severed formal diplomatic ties with Taipei in 1979 in favour of Beijing, the two sides retained unofficial relations that have grown ever-closer in recent years, including an increase in military exchanges and cooperation.

“The new name [was made possible] as a result of the consensus between Taiwan and the US,” the island’s President Tsai Ing-wen said in a Facebook post. “This is the first time the designations ‘Taiwan and the US’ have been used to refer to each other’s affairs office on an equal basis, signifying the firm and close relationship.”

Taiwan begins mass production of missile corvettes, minelayers

Taiwan had been forced to use the old title because of the “special historical background” related to the change in diplomatic allegiance 40 years ago, Tsai said.

Beijing, which considers Taiwan a wayward province awaiting reunification, by force if necessary, has demanded that Washington observe the one-China policy by not officially recognising Taiwan or allowing it to use either “Republic of China” – the island’s official name – or “Taiwan” in the title of its representative offices in the US.

Washington also enacted the Taiwan Relations Act in 1979 to prescribes relations with the island and includes a commitment to supply it with arms to protect itself.

“After continuous efforts and coordination by the two sides, and in 2019, the 40th anniversary of the Taiwan Relations Act, our office handling relations with the US is finally able to change its name,” Tsai said.

The American Institute in Taiwan relocated to a larger, purpose-built compound last month. Photo: Bloomberg
The American Institute in Taiwan relocated to a larger, purpose-built compound last month. Photo: Bloomberg

Presidential spokesman Alex Huang said the name change was due mainly to an improvement in relations between Taiwan and the US as a result of a greater cooperation on the promotion of regional peace and the Indo-Pacific security agenda.

“In the past few years, the US government has given Taiwan strong and firm support in terms of national security and participation in international events, as well as support from Congress and think tanks,” he said, referring to bills signed by US President Donald Trump that allow for exchanges between high-level officials and military personnel, and the approval of new sales of arms and logistical support to the island.

US official urges Pacific island nations to maintain diplomatic ties with Taiwan

Also, last week, Taiwan’s national security chief David Lee met US National Security Adviser John Bolton in Washington for the first talks of their kind since 1979, Taiwan’s Central News Agency reported on Saturday.

Last month, the American Institute in Taiwan – the United States’ unofficial embassy in Taipei – relocated to a significantly larger, purpose-built compound, in yet another sign of improving relations.

US support for Taiwan has increased under Trump’s leadership as he regards Beijing as a hostile competitor, not only on trade, but also in military and global influence terms.

Tensions between Taipei and Beijing have flared since Tsai became president in 2016 and refused to accept the one-China principle. The mainland subsequently halted all official exchanges with the island and embarked on a campaign to squeeze its diplomatic allies around the world.

Source: SCMP

28/05/2019

Taiwan lands warplanes on highway as part of military exercise

  • President Tsai Ing-wen says Taipei should ‘maintain a high degree of vigilance’
  • Exercise simulates response to attack from mainland on military bases
President Tsai Ing-wen and senior Taiwanese military staff during an exercise in southern county Changhua, not far from one of the island’s main airbases at Taichung. Photo: Facebook
President Tsai Ing-wen and senior Taiwanese military staff during an exercise in southern county Changhua, not far from one of the island’s main airbases at Taichung. Photo: Facebook
Taiwanese warplanes landed on a highway on Tuesday as part of annual exercises designed to test the island’s military capabilities and resolve to repel an attack from the mainland across the Taiwan Strait.
President Tsai Ing-wen watched the exercise in the southern county of Changhua, not far from one of Taiwan’s main airbases at Taichung.
“Our national security has faced multiple challenges,” Tsai said. “Whether it is the Chinese Communist Party’s [People’s Liberation Army] long-distance training or its fighter jets circling Taiwan, it has posed a certain degree of threat to regional peace and stability.
“We should maintain a high degree of vigilance,” she said.
Taiwanese warplanes are parked on a highway during an exercise to simulate a response to a mainland attack on its airfields in Changhua. Photo: AP
Taiwanese warplanes are parked on a highway during an exercise to simulate a response to a mainland attack on its airfields in Changhua. Photo: AP

Aircraft involved in the exercise included US-made F-16 Fighting Falcons, French Mirage 2000s, Taiwan-made IDF fighter jets and US-built Northrop Grumman E-2 Hawkeye surveillance aircraft.

Ground crews practised refuelling and ammunition replenishment before the aircraft returned to the air. About 1,600 service personnel were mobilised in Tuesday’s exercise.

The event marked the exercise debut of the first F-16 upgraded to the V variant, featuring advanced radar and combat capabilities. Taiwan is spending about US$4.21 billion to upgrade 144 F-16As and Bs to the F-16V version.

Rare meeting between Taiwanese, US security officials angers Beijing
Taiwan buys military hardware mainly from the US and has asked to purchase new F-16V fighters and M1 Abrams tanks.

American arms sales to Taiwan have long been a thorn in the side of US relations with China, routinely drawing protests from Beijing that Washington had reneged on commitments.

Beijing has also been angered by warming relations between Taipei and Washington since Tsai came to power in 2016.

On Monday, Beijing reacted frostily to photos showing a rare meeting between uniformed Taiwanese officers and their US counterparts this month.

A Mirage 2000-5 fighter jet takes off from a highway during an emergency take-off and landing drill in Changhua, Taiwan. Photo: EPA
A Mirage 2000-5 fighter jet takes off from a highway during an emergency take-off and landing drill in Changhua, Taiwan. Photo: EPA

Last week, Beijing lodged a protest with Washington after two US warships sailed through the Taiwan Strait.

Taiwan expected to be outgunned in terms of troop numbers and firepower in any war with mainland China but it claimed to have had developed sophisticated asymmetric warfare tactics to make any invasion costly for Beijing.

“There are only a few military airbases which would become the prime targets in the event of an attack. The highway drill is necessary as highway strips would be our priority choice if the runways were damaged during a war,” air force Colonel Shu Kuo-mao.

Taiwan changes name of de facto embassy in United States to ‘reflect stronger ties’

Taiwan’s Central News Agency said highway take-off and landing drills last took place in 2014. A military source told CNA that Tuesday’s drill was not much different from those conducted by the military during the Han Kuang exercises, but it was still challenging.

Among the challenges were that the drill could not be rehearsed and it required clear communications between the military, police and the National Freeway Bureau, said the source.

Source: SCMP

23/05/2019

U.S. Navy again sails through Taiwan Strait, angering China

WASHINGTON (Reuters) – The U.S. military said it sent two Navy ships through the Taiwan Strait on Wednesday, its latest transit through the sensitive waterway, angering China at a time of tense relations between the world’s two biggest economies.

Taiwan is one of a growing number of flashpoints in the U.S.-China relationship, which also include a bitter trade war, U.S. sanctions and China’s increasingly muscular military posture in the South China Sea, where the United States also conducts freedom-of-navigation patrols.

The voyage will be viewed by self-ruled Taiwan as a sign of support from the Trump administration amid growing friction between Taipei and Beijing, which views the island as a breakaway province.

The transit was carried out by the destroyer Preble and the Navy oil tanker Walter S. Diehl, a U.S. military spokesman told Reuters.

“The ships’ transit through the Taiwan Strait demonstrates the U.S. commitment to a free and open Indo-Pacific,” Commander Clay Doss, a spokesman for the U.S. Navy’s Seventh Fleet, said in a statement.

Doss said all interactions were safe and professional.

Chinese Foreign Ministry spokesman Lu Kang said Beijing had lodged “stern representations” with the United States.
“The Taiwan issue is the most sensitive in China-U.S. relations,” he told a daily news briefing in Beijing.
Taiwan’s Defense Ministry said the two U.S. ships had sailed north through the Taiwan Strait and that they had monitored the mission.
Taiwan President Tsai Ing-wen said there was no cause for alarm.
“Nothing abnormal happened during it, please everyone rest assured,” she wrote on her Facebook page.
U.S. warships have sailed through the Taiwan Strait at least once a month since the start of this year. The United States restarted such missions on a regular basis last July.
The United States has no formal ties with Taiwan but is bound by law to help provide the island with the means to defend itself and is its main source of arms.
The Pentagon says Washington has sold Taipei more than $15 billion in weaponry since 2010.
China has been ramping up pressure to assert its sovereignty over the island, which it considers part of “one China” and sacred Chinese territory, to be brought under Beijing’s control by force if needed.
Beijing said a recent Taiwan Strait passage by a French warship, first reported by Reuters, was illegal.
China has repeatedly sent military aircraft and ships to circle Taiwan on exercises in the past few years and worked to isolate it internationally, whittling down its few remaining diplomatic allies.
The U.S. Defense Intelligence Agency released a report earlier this year describing Taiwan as the “primary driver” for China’s military modernization, which it said had made major advances in recent years.
On Sunday, the Preble sailed near the disputed Scarborough Shoal claimed by China in the South China Sea, angering Beijing.
The state-run China Daily said in an editorial on Wednesday that China had shown “utmost restraint”.
“With tensions between the two countries already rife, there is no guarantee that the presence of U.S. warships on China’s doorstep will not spark direct confrontation between the two militaries,” it said.
Source: Reuters
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