Posts tagged ‘Japan’

21/08/2013

China, Japan, and India’s Asian Arms Race

BusinessWeek: “China and Japan managed to get past the Aug. 15 anniversary of the Japanese surrender in World War II without incident. For weeks leading up to the date, the question was, will he or won’t he? Will Shinzo Abe, the conservative prime minister who last year infuriated the Chinese by visiting the Yasukini Shrine in Tokyo, which commemorates Japan’s war dead—including war criminals from World War II—go to the shrine on the anniversary?

Japan's 19,500-ton Izumo helicopter carrier is launched in Yokohama on Aug. 6

Abe has enough on his agenda without provoking another crisis with China, so he decided to stay clear. Three members of his cabinet did go to Yasukini, part of a group of 100 members of Japan’s parliament who prayed at the shrine. While Abe wasn’t one of them, the prime minister did make a gesture to his nationalist supporters, sending a cash offering to the shrine.

Another day, another crisis in the ongoing saga of the dispute between the two Asian powers over uninhabited rocks in the East China Sea. Today, China’s official China Central Television reported the People’s Liberation Army had started 10 days of live-fire military exercises in the waters near the islands, which Japan calls the Senkaku and the Chinese call the Diaoyu. In a highly symbolic move, one ship taking part in the exercises is the Liaoning, China’s first aircraft carrier.

The Liaoning is part of a three-way arms race involving the naval forces of China, Japan, and the other big Asian power, India. With China embroiled in territorial disputes with both Japan and India, all three countries are coming out with bigger and better warships to make sure they hold their own in the region.

For Japan, the big news is a 19,500-ton helicopter carrier called the Izumo, which the government unveiled on Aug. 6. It’s the third such warship in Japan’s self-defense force and the biggest Japanese-made military vessel since the end of World War II. That’s big for Japan but still small compared with U.S. aircraft carriers, which displace 97,000 tons when fully loaded.

Still, the Chinese are not happy about the Izumo’s launch. The helicopter carrier is a “symbol of Japan’s strong wish to return to its time as a military power,” the Global Times wrote the next day.

India, meanwhile, has launched its first aircraft carrier, unveiled on Monday. That’s a challenge to China, the Global Times editorialized. “China should speed up its construction of domestic aircraft carriers,” it said. “The earlier China establishes its own aircraft carrier capabilities, the earlier it will gain the strategic initiative.”

India has tripled military spending over the past 10 years and in February announced more spending, with a 14 percent increase in defense outlays. The border dispute between India and China isn’t as hot as the one between Japan and China, but it involves much more land: India says China is occupying 38,000 square kilometers of Indian territory in Jummu and Kashmir (the much-disputed region in the north of India that is also claimed by Pakistan). China says India is occupying 90,000 square kilometers of Chinese territory in Arunachal Pradesh (a state in northeastern India near Bhutan and Tibet).””

via China, Japan, and India’s Asian Arms Race – Businessweek.

21/08/2013

China’s Xi “Lurches” to the Left, Promotes Maoist Revival

Meadia: “In a move sure to dismay the people inside and outside China who hoped Xi Jinping would begin a new era of democratic reform, China’s president has “lurched” to the left, as the WSJ reports, promoting a revitalized version of nationalist Maoism across the country. ”Our red nation will never change color,” Xi said during a ceremony at Mao’s old lakeside mansion in Wuhan, declaring that the villa should become a center to educate young people about patriotism and revolution.

“It isn’t just Mr. Xi’s rhetoric that has taken on a Maoist tinge in recent months,” the Journal reports. “He has borrowed from Mao’s tactical playbook, launching a ‘rectification’ campaign to purify the Communist Party, while tightening limits on discussion of ideas such as democracy, rule of law and enforcement of the constitution.”

Xi appears to have capitalized on some uncertainty at the top levels of the Party after the fall of Bo Xilai, a charismatic and popular leader who also led a Maoist revival campaign and became a threat to the stability of the Party leadership. “Many of Mr. Bo’s former supporters and several powerful princelings have thrown their weight behind Mr. Xi’s efforts to establish himself as much a stronger leader than his predecessor,” party insiders told the WSJ.

Xi’s nationalist streak comes as the country prepares for Bo Xilai’s trial and amid an economic downturn that has caused worry among investors and analysts. At the same time, China and other Asian powers are engaged in a dangerous and accelerating game of military one-upmanship. New ships and maritime units are being unveiled from India to the Philippines to Japan and territorial disputes are growing more intense. Across the region, this trend is driven in part by a rising nationalism among citizens—in Japan, South Korea, the Philippines, India, elsewhere—who push their governments into increasingly aggressive and antagonistic positions against the neighbors. China is no exception.”

[Xi Jinping photo courtesy of Shutterstock]

via China’s Xi “Lurches” to the Left, Promotes Maoist Revival | Via Meadia.

19/08/2013

Japan’s Giant New Destroyer Sends A Clear Message To China, The World

Business Insider: “Sixty-eight years to the day of the Hiroshima bombing, Japan unveiled its new naval “destroyer” that happens to have a flat-top – dubbed “Izumo” — capable of carrying various rotary-wing aviation units, reports Eric Talmadge of ABC.

The Izumo has been in construction since 2009.

The new boat comes as Chinese officials say the country is in “no rush” to sign a code of conduct guiding military behaviour in the contested South China Sea.

From ABC:

[S]ome experts believe the new Japanese ship could potentially be used in the future to launch fighter jets or other aircraft that have the ability to take off vertically. That would be a departure for Japan, which has one of the best equipped and best trained naval forces in the Pacific but which has not sought to build aircraft carriers of its own because of constitutional restrictions that limit its military forces to a defensive role.

The “constitutional restrictions” refer to the American-written post-World War II Japanese Constitution which stipulated — among other things — a ban on the construction of certain military equipment. To this day, Japan euphemistically refers to its army as a Self-Defence Force.

Still, a restless Beijing patrolling more and more in the South China Sea, as well as an unpredictable North Korea, have caused alarm in some Japanese citizens. They’ve been pushing for more military spending, some say for fear that American sequester means a shorter reach for Washington in the island disputes.

Japan’s most recent defence white paper covered an increased budget and mentioned Chinese encroachment directly, “China has attempted to change the status quo by force based on its own assertion, which is incompatible with the existing order of international law.”

Two of the aims of Japan’s first increase in defence spending in 11 years were, according to the WSJ, “developing the ability to launch pre-emptive attacks on enemy bases abroad and the creation of an amphibious force similar to the U.S. Marine Corps.”

This even amid the widely touted U.S. “pacific pivot” and recent news of the Philippines sending a refurbished American Coast Guard cutter to join up with another used U.S. cutter in patrolling the contested seas.

China’s appetite for natural resources is growing though, so more Americans and cutters are unlikely to deter their claims. From Reuters:

Friction over the South China Sea, one of the world’s most important waterways, has surged as China uses its growing naval might to more forcefully assert its vast claims over the oil- and gas-rich sea, raising fears of a military clash.

Japan’s new flat-top doesn’t have slingshots for fixed wing aircraft — yet — but certainly the helicopters the boat carries will help patrol what Japan takes to be its sovereign territory.

Nonetheless, they say the boat is primarily for relief from natural disasters, something Japan has had no shortage of over the last few years.

In September, China will host the 10-member Association of Southeast Asian Nations (ASEAN) for talks on a maritime Code of Conduct regulating passage in the South China Sea.”

via Japan’s Giant New Destroyer Sends A Clear Message To China, The World | Business Insider Australia.

19/08/2013

China summons Japanese ambassador over shrine visit

Reuters: “China summoned Japan’s ambassador on Thursday to lodge a strong complaint after two Japanese cabinet ministers publicly paid their respects at a controversial Tokyo shrine for war dead, the Chinese Foreign Ministry said.

Anti-Japan protesters carry posters depicting Japanese Prime Minister Shinzo Abe as they march to the Japanese consulate in Hong Kong August 15, 2013. REUTERS/Tyrone Siu

The ministers’ visit to the Yasukuni Shrine “seriously harms the feelings of the people in China and other Asian victim countries”, the ministry said in a statement.

Visits to the shrine by top Japanese politicians outrage China and South Korea because it honors 14 Japanese wartime leaders convicted as war criminals by an Allied tribunal, along with war dead.

For Koreans, the shrine is a reminder of Japan’s brutal colonial rule from 1910-1945. China also suffered under Japanese occupation before and during World War Two.

Chinese Deputy Foreign Minister Liu Zhenmin summoned Japanese ambassador Masato Kitera for an emergency meeting to lodge “stern representations and express strong opposition and severe condemnation”, the ministry said.

“The issue of the Yasukuni Shrine relates to whether or not Japan can correctly recognize and face up to the history of invasion of the Japanese militarists and whether or not they can respect the feelings of the people of China and the other victim nations in Asia,” the ministry said.”

via China summons Japanese ambassador over shrine visit | Reuters.

19/08/2013

A gaffe-prone Japan is a danger to peace in Asia; China concerned

Are we inching towards a military confrontation between thes two East Asian powers?

29/07/2013

Japan’s top diplomat heads for China seeking better ties | Reuters

Reuters: “Japanese Vice Foreign Minister Akitaka Saiki will visit China on Monday and Tuesday for talks with senior officials, the latest in a series of efforts by Prime Minister Shinzo Abe to improve relations soured by a bitter territorial row.

Japan's chief envoy to the six-party talks Akitaka Saiki arrives at Beijing airport November 30, 2010. REUTERS/Jason Lee

The hawkish Abe, who cemented his grip on power in an upper house election last week, called on Friday for an unconditional meeting between Japanese and Chinese leaders.

On Sunday, Isao Iijima, an adviser to the premier, told reporters that Abe could soon hold a summit with Chinese President Xi Jinping.

Often fragile Sino-Japanese ties have been seriously strained since September, when a territorial row over tiny islands in the East China Sea flared following Japan’s nationalization of the uninhabited isles.

Concern that the conservative Japanese leader wants to recast Japan’s wartime history with a less apologetic tone has added to the tension.

“Vice Minister Saiki will visit China on July 29-30 and exchange views with Chinese officials,” a Japanese foreign ministry spokesman said. He did not give further details.

China’s Foreign Ministry responded to Abe’s overture on Friday by saying its door was always open for talks but that the problem lay in Japan’s attitude.”

via Japan’s top diplomat heads for China seeking better ties | Reuters.

09/07/2013

Newly discovered ancient maps support Chinese territorial claims

It’s a dangerous precedent to rely on ancient maps. The reason is that unless one goes back far enough, there is always the chance there is another set of older maps that refute the ones you think have the final word on your claims.

19/06/2013

The yuan: The cheapest thing going is gone

The Economist: “After enduring a decade of criticism for its weakness, China’s currency now looks uncomfortably strong

TEN years ago, the yuan made its debut as a global economic bugbear. In June 2003, America’s then treasury secretary, John Snow, publicly encouraged China to loosen a policy under which its currency was pegged at 8.28 to the dollar. The next month four senators wrote an angry letter urging Mr Snow to investigate China for “currency manipulation”. The country was intentionally undervaluing its currency, argued Charles Schumer, a Democratic senator for New York. “The result is that everything they sell to other countries is the cheapest thing going.”

A decade later, Mr Schumer and other senators are still bashing the yuan: eight of them re-introduced a bill last week that would slap duties on currency manipulators. But much else has changed. Now allowed to float by 1% a day on either side of a reference rate set each morning by the central bank, the yuan closed trading on May 27th at 6.12 to the dollar, 35% stronger than its June 2003 rate. It has risen more against the dollar since March than it rose in the whole of last year, and its climb against Japan’s currency has been even steeper. Since November, when the markets began to anticipate dramatic monetary easing in Japan, the yuan has gained over 20% against a weakened yen.

China’s competitiveness on world markets depends not only on the price of its currency but also on the price of its goods and workers at home. The Bank for International Settlements calculates a “real” exchange rate for 61 economies that takes account of inflation differences between them. Since 2010 China’s real exchange rate, weighted by trade, has risen faster than any other, with the sole exception of Venezuela’s.

The price of labour is also rising faster in China than in its principal trading partners. The Economist has calculated an alternative “real” exchange rate, weighted by trade with America, the euro area and Japan, which takes account of unit labour costs in all four economies. By this measure, China’s real exchange rate has strengthened by almost 50% since Messrs Snow and Schumer began their currency-bashing ten years ago. If the yuan was the cheapest thing going back then, now its cheapness has all but gone. Some economists, such as Diana Choyleva of Lombard Street Research, even wonder if the yuan is now overvalued.”

via The yuan: The cheapest thing going is gone | The Economist.

03/06/2013

China not disputing Japan sovereignty over Okinawa

Reuters: “China does not dispute Japanese sovereignty over Okinawa and recent comments in Chinese newspapers merely reflects the views of some academics, a senior Chinese military leader said on Sunday.

China's People's Liberation Army (PLA) Deputy Chief of General Staff, Lieutenant General Qi Jianguo, adjusts his headset before speaking at the fourth plenary session of the 12th International Institute for Strategic Studies (IISS) Asia Security Summit: The Shangri-La Dialogue, in Singapore June 2, 2013. REUTERS/Edgar Su

“China’s position has not changed… Scholars can put forth any idea they want and they do not represent the views of the Chinese government,” the deputy chief of general staff of the Chinese People’s Liberation Army, Lieutenant General Qi Jianguo, told delegates at a security conference in Singapore.

China’s state-owned People’s Daily last month published an article by two academics that said Okinawa was part of an island chain that used to be a vassal of imperial Chinese dynasties before it was annexed by Japan in the 19th century, implicitly asserting Chinese claims over the island.

Okinawa, host to the bulk of up to 50,000 U.S. military personnel in Japan, is the largest island in the Ryukyu chain, which extends south towards Taiwan.

China is already involved in a tense dispute with Japan over the latter’s move last year to nationalise the nearby Senkaku islets, which the Chinese call Diaoyu, which sits astride key shipping lanes and undersea energy resources.

That row has escalated in recent months to the point where both sides have scrambled fighter jets while patrol ships shadow each other in nearby seas, raising worry that an unintended collision or other incident could lead to a broader clash.”

via China not disputing Japan sovereignty over Okinawa | Reuters.

01/06/2013

Yuan may continue to appreciate

China Daily: “The yuan may be trading at below 6.1 against the US dollar as the Chinese currency continues to rise in the next few months, said a currency analyst at DBS Bank.

Yuan may continue to appreciate

A trader with an Asian bank in Shanghai said that the yuan’s valuation has peaked for a few days, while sales of dollars are easing.

An employee from the Industrial and Commercial Bank of China is counting the renminbi and Japanese yen in Huaibei, Anhui province, on May 17. The yuan has gained some 20 percent against the yen since the beginning of the year. Woo He / For China Daily

“Most of my peers working in Shanghai share the opinion that in the short term the renminbi may further appreciate against the US dollar,” the trader said.

China’s central bank, the People’s Bank of China, set the yuan’s midpoint at a record-high level of 6.1796 against the US dollar, while the spot yuan closed at 6.1345 per dollar on Friday.

It has been 12 months since Japan’s yen and China’s yuan became directly convertible, and the yuan has gained some 20 percent against the yen since the beginning of the year.

The appreciation of the yuan and the depreciation of the yen may cast risks to China’s currency as it’s the only currency which lacks the elasticity of East Asian economies, wrote Liu Yuhui, a financial researcher at the Chinese Academy of Social Sciences in an article published on Tuesday.

“It has been very difficult for us to guarantee orders from Japan these days because our price advantage disappeared,” said Yuan Hongtao, owner of a Hangzhou-based plastic production company, which exports some 40 percent of its products to Japan.

Analysts said that policymakers now have to figure out ways to help companies grow, as the renminbi is increasingly going global.

“While the benefits of direct convertibility between the renminbi and other currencies are obvious, including cutting the costs of exchange and reducing the risks brought by the fluctuation of the US dollar, it can also bring some risks to companies and regions in China whose growth is driven by foreign trade,” said Liu Yang, a foreign exchange analyst with Shanghai Gaofu Consultancy.

Currently, the yuan is directly convertible to the yen and the Australian dollar. New Zealand and China are in an early stage of negotiations for direct convertibility of each other’s currencies, according to a Reuters report on May 26.

“One important step to make the renmibi more internationalized is to use more yuan in direct investment overseas”, said Nathan Chow, vice-president and economist of group research with DBS Bank (Hong Kong) Ltd.

Chow said that only about 6 percent of China’s outbound direct investment uses renminbi, while 36 percent of foreign direct investment in China uses renminbi.

If regulations on ODI using renminbi are eased, a large amount of yuan will be released to overseas markets and help divert risks of the fluctuation of the US dollar, which is being used for foreign exchange reserves, said Chow.

He added that more big corporations may want to issue dim sum bonds — yuan-denominated bonds issued in Hong Kong — as the renminbi bond market grew significantly this year, driven by lower funding costs, improved macroeconomic conditions and the heightened expectations for yuan appreciation.

“Despite all these factors, market facilities for renminbi bonds still have a lot of catching up to do. Decision makers and financial institutions need to work closer with corporations, while continuing to improve the fundraising infrastructure in offshore renminbi centers such as Hong Kong and Singapore,” he said.

The yuan had appreciated 1.72 percent against the dollar since the beginning of the year, following a moderate gain of 1.03 percent throughout 2012.”

via Yuan may continue to appreciate |Economy |chinadaily.com.cn.

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