US-China (& Japan, South China Sea-- Taiwan, Vietnam, Philippines, etc)

[G M]

http://www.atimes.com/atimes/China/MK22Ad01.html

It might not be an Asian century after all
By Spengler

Here's a thought experiment: if the United States and China maintain their present fertility rate and educational systems through the end of the century, which country will have the stronger economy? This is not a forecast, to be sure, just a point of perspective at a distant horizon.

[Crafty_Dog]

It IS interesting, but the reference to the Philippines in the subject heading for this thread is in the context of China.  For the Philippines as such please post in the Phiippines thread.  TIA.

[Crafty_Dog]

By MIKE MCCONNELL, MICHAEL CHERTOFF AND WILLIAM LYNN
Only three months ago, we would have violated U.S. secrecy laws by sharing what we write here—even though, as a former director of national intelligence, secretary of homeland security, and deputy secretary of defense, we have long known it to be true. The Chinese government has a national policy of economic espionage in cyberspace. In fact, the Chinese are the world's most active and persistent practitioners of cyber espionage today.

Evidence of China's economically devastating theft of proprietary technologies and other intellectual property from U.S. companies is growing. Only in October 2011 were details declassified in a report to Congress by the Office of the National Counterintelligence Executive. Each of us has been speaking publicly for years about the ability of cyber terrorists to cripple our critical infrastructure, including financial networks and the power grid. Now this report finally reveals what we couldn't say before: The threat of economic cyber espionage looms even more ominously.

The report is a summation of the catastrophic impact cyber espionage could have on the U.S. economy and global competitiveness over the next decade. Evidence indicates that China intends to help build its economy by intellectual-property theft rather than by innovation and investment in research and development (two strong suits of the U.S. economy). The nature of the Chinese economy offers a powerful motive to do so.

According to 2009 estimates by the United Nations, China has a population of 1.3 billion, with 468 million (about 36% of the population) living on less than $2 a day. While Chinese poverty has declined dramatically in the last 30 years, income inequality has increased, with much greater benefits going to the relatively small portion of educated people in urban areas, where about 25% of the population lives.

The bottom line is this: China has a massive, inexpensive work force ravenous for economic growth. It is much more efficient for the Chinese to steal innovations and intellectual property—the source code of advanced economies—than to incur the cost and time of creating their own. They turn those stolen ideas directly into production, creating products faster and cheaper than the U.S. and others.

Cyberspace is an ideal medium for stealing intellectual capital. Hackers can easily penetrate systems that transfer large amounts of data, while corporations and governments have a very hard time identifying specific perpetrators.

Unfortunately, it is also difficult to estimate the economic cost of these thefts to the U.S. economy. The report to Congress calls the cost "large" and notes that this includes corporate revenues, jobs, innovation and impacts to national security. Although a rigorous assessment has not been done, we think it is safe to say that "large" easily means billions of dollars and millions of jobs.

So how to protect ourselves from this economic threat? First, we must acknowledge its severity and understand that its impacts are more long-term than immediate. And we need to respond with all of the diplomatic, trade, economic and technological tools at our disposal.

The report to Congress notes that the U.S. intelligence community has improved its collaboration to better address cyber espionage in the military and national-security areas. Yet today's legislative framework severely restricts us from fully addressing domestic economic espionage. The intelligence community must gain a stronger role in collecting and analyzing this economic data and making it available to appropriate government and commercial entities.

Congress and the administration must also create the means to actively force more information-sharing. While organizations (both in government and in the private sector) claim to share information, the opposite is usually the case, and this must be actively fixed.

The U.S. also must make broader investments in education to produce many more workers with science, technology, engineering and math skills. Our country reacted to the Soviet Union's 1957 launch of Sputnik with investments in math and science education that launched the age of digital communications. Now is the time for a similar approach to build the skills our nation will need to compete in a global economy vastly different from 50 years ago.

Corporate America must do its part, too. If we are to ever understand the extent of cyber espionage, companies must be more open and aggressive about identifying, acknowledging and reporting incidents of cyber theft. Congress is considering legislation to require this, and the idea deserves support. Companies must also invest more in enhancing their employees' cyber skills; it is shocking how many cyber-security breaches result from simple human error such as coding mistakes or lost discs and laptops.

In this election year, our economy will take center stage, as will China and its role in issues such as monetary policy. If we are to protect ourselves against irreversible long-term damage, the economic issues behind cyber espionage must share some of that spotlight.

Mr. McConnell, a retired Navy vice admiral and former director of the National Security Agency (1992-96) and director of national intelligence (2007-09), is vice chairman of Booz Allen Hamilton. Mr. Chertoff, a former secretary of homeland security (2005-09), is senior counsel at Covington & Burling. Mr. Lynn has served as deputy secretary of defense (2009-11) and undersecretary of defense (1997-2001

[ccp]

"Corporate America must do its part, too. If we are to ever understand the extent of cyber espionage, companies must be more open and aggressive about identifying, acknowledging and reporting incidents of cyber theft."

Good luck.

Indeed.  Some companies are doing the espionage.   Some have departments of hackers paid to hack around.

Brockster can talk all he wants about new Federal agencies to go after bad mortgage loans and some Wall St practices.  But this stuff is far worse and far more insidious and a far greater challenge to everyone.   

At least we now know there are three people in DC are even talking about it   

[G M]

**This would be the same Hollywood that spent the last decade churning out anti-military propaganda films.

http://the-diplomat.com/2012/02/15/hollywood-bows-to-china-soft-power/2/?all=true


Hollywood Bows to China Soft Power
February 15, 2012

By Cain Nunns

Hollywood actress Meryl Streep recently hitched a ride on a Chinese businessman’s private jet to Beijing. Once there, she met up with idiosyncratic writer-director Joel Coen and Raise the Red Lantern director Zhang Yimou to promote “China’s exploding film industry.”
 
Zhang, who served as the artistic director for both the 2008 Beijing Olympic Games and the lavish 60th anniversary celebrations of the Chinese Communist Party, also unveiled his remake of Coen’s influential first film – Blood Simple.
 
And this sounds simple enough.
 
But for some industry insiders, the trio personify a growing partnership between Beijing’s aspirations to export what it calls “soft power” – a sugarcoated version of China and its myriad social problems – to the West and Hollywood producers, who are bending over backwards to get a piece of the world’s fastest growing film market.
 
“It’s obvious why media is controlled in Communist societies. But what makes China unique is that for the first time, it has the money and market to shift control of media for a local audience to control of external representations of the country,” says Liu Lee-shin, a China film expert at Taipei’s National Taiwan University of Arts.
 
“Chinese-Hollywood co-productions are vehicles for Beijing to dictate the China narrative outside its borders.”
 
Liu says that Beijing has made no secret of its eagerness to build that narrative through movies, and points to a recent plenum of the Central Committee of the Communist Party endorsing guidelines to boost what it calls “cultural security,” by “propelling Chinese culture overseas.”
 
To do this, Beijing says it will double its entertainment and cultural earnings to roughly $460 billion within the next five years.
 
Critics claim that studios will be pressured to produce works that depict China in a sympathetic light, a fear prompted by China’s strict controls over film importation, distribution and production, along with the rebuffing of recent WTO rulings to allow foreign distribution and expand a 20-a-year cap on foreign movies.
 
“They made it very clear in their last congress meeting that the overriding theme would be projecting an image overseas that they want projected, while Hollywood’s No.1 concern has always been the bottom line,” says Michael Berry, a lecturer of East Asian Languages and Cultural Studies at University of California, Santa Barbara.
 
“U.S. producers are taking an ultra-conservative route, and self-censorship is happening at a very early stage. In concept development there’s already an understanding of what will fly in China, and that gets concentrated by the time it gets to a screenplay.”
 
And what flies in China today isn’t very much.
 
Beijing’s thumbscrew restrictions include: No sex, religion, time travel, the occult, or “anything that could threaten public morality or portray criminal behavior.”
 
All film scripts have to be signed off by a government censor and anything that depicts Tibet, Tiananmen Square, the Dalai Lama, Falun Gong, Uyghur separatists or Taiwan favorably is typically banned.
 
For Hollywood, however, the proof is still in the numbers. Turnstile revenues in China skyrocketed by 64 percent to $1.5 billion, and have surged nearly tenfold since 2003.
 
While China has been heavily criticized for its foreign film cap, Western producers are bypassing those restrictions by aligning with local partners, most of which are state-run, and all of which have strong ties to the party and state.
 

The deals also offer filmmakers access to cash-rich Chinese investors, who face significant restrictions on sending their money overseas.

[G M]

http://blogs.the-american-interest.com/wrm/2012/03/19/japan-warns-of-chinese-threat/

March 19, 2012


Japan Warns of Chinese Threat


Tensions are rising between the two largest economies and most powerful military forces in Asia: Japan’s Prime Minister Yoshiko Noda is using some very un-Japanese language (direct, forceful, naming names) to address what he sees as a growing threat. As the [paywall alert] Wall Street Journal reports, Noda told graduating cadets at Japan’s National Defense Academy that:
 

“Circumstances in our surrounding regions are increasingly severe, complicated, and remain uncertain, as depicted in moves by North Korea including nuclear and missile forces, and China, which is reinforcing its military capabilities and continuing activities in surrounding waters.”
 
Those are tough words from a political culture that is often mealy-mouthed, and even more striking because the current Japanese government took office amidst talk of hoping to distance itself from the US and seek a more “balanced” relationship between the US and China.
 
Noda’s latest remarks (which reflect his longtime personal views) came after an incident last week in which a Chinese ship entered what Japan claims as its territorial waters around a disputed island chain that Japan controls but China claims. Chinese aggressiveness — and its failure to rein in its awkward and embarrassing North Korean sidekick — is steadily alienating the ring of countries around it and continues to drive them into Uncle Sam’s embrace.
 
In China, these assertive policies sometimes seem to originate without the blessing or even the knowledge of the Foreign Ministry, longtime observers tell Via Meadia. It is not just that the People’s Liberation Army generally takes a harder line, and its leaders have less time abroad and less understanding of the regional and global realities that shape China’s options; it is that often sub-agencies like the equivalent of the Coast Guard take provocative steps on their own authority without clearing it with higher ups. When the incident — like a decision to send a ship into disputed waters — blows up into a public controversy, nationalist opinion inside China makes it hard for the government to back down.
 
It’s no way for a great power to run its foreign policy in a volatile region, and this policy of random pinpricks has not served China well. It has, however, considerably added to America’s power in Asia: solidifying its alliances, encouraging allies to step up their military spending, and providing strong arguments to those in the US who believe that China’s growing assertiveness justifies high military budgets here.
 
If the smart people in China ever get secure control of the country’s foreign policy, the US task in Asia will become considerably tougher.

[Crafty_Dog]

http://online.wsj.com/article/SB10001424052702304750404577319922446665462.html?mod=WSJ_hps_editorsPicks_3

[Crafty_Dog]

second post of day
http://online.wsj.com/article/SB10001424052702304750404577321293961760020.html?mod=WSJ_World_LEFTSecondNews
By JAMES HOOKWAY
PHNOM PENH—Philippine President Benigno Aquino III Tuesday pushed other Southeast Asian nations meeting here in Cambodia to adopt a common stand on negotiating the flash point issue of territorial rights to the resource-rich South China Sea before bringing the region's powerhouse, China, into the discussions.

The Philippines and other members of the 10-country Association of Southeast Asian Nations are attempting to frame a regional, legally binding code of conduct to guide sovereignty claims in the waters, which are claimed in whole or in part by China, the Philippines, Vietnam, Malaysia, Taiwan and Brunei. China has expressed an interest in playing an earlier role in the discussions, a move which Asean Secretary-General Surin Pitsuwan has said is a sign of progress in that it shows Beijing is willing to engage with the Southeast Asian nations in finding a solution to the hot-button issue.

But the Philippines, backed by Vietnam, according to people familiar with the situation, is resisting. "It is important that we maintain Asean centrality," Mr. Aquino said during the meeting of Asean leaders. "After the code of conduct has been finalized by Asean, then Asean member states will meet with China."

Discussions over the South China Sea have loomed large over the summit despite key China ally Cambodia's attempts to play down the controversy. Chinese President Hu Jintao visited Cambodia shortly before the summit in an apparent bid to strengthen Beijing's already robust ties to Prime Minister Hun Sen and make sure that the territorial dispute is discussed as little as possible.

The Philippines and other nations, though, have insisted on raising the issue after 12 months of increasingly testy conflicts in the area. Vietnam and Manila regularly have accused China of intimidating fishermen and sabotaging oil exploration vessels. China denies doing so, but warns Vietnam and the Philippines from prospecting for oil and natural gas off their shores without China's permission.

Occasionally the disputes turn violent. In 1988, a spat between China and Vietnam resulted in the deaths of more than 70 Vietnamese sailors. Many diplomats fear that the current animosity and rising appetite for energy and fish stocks in the region could provoke further bloodshed.

continued

[Crafty_Dog]

http://online.wsj.com/article/SB10001424052702303459004577362360212353368.html?mod=WSJEUROPE_hpp_sections_world
U.S. Saw Top Cop as Risky Asylum Candidate
.smaller Larger  By JAY SOLOMON And DEVLIN BARRETT

WASHINGTON—The former police chief in the Chinese city of Chongqing would appear, on the face of it, a good candidate to receive diplomatic protection or political asylum from the U.S., due to his access to senior Communist Party officials and intelligence.

But to the Obama administration, which needed to decide Wang Lijun's fate in early February due to his role in a widening political scandal inside China, the decision was murkier.

U.S. officials have risked confrontation with Beijing before over how to handle Chinese citizens. During the 1989 Tiananmen political uprising, Chinese dissident and democracy advocate Fang Lizhi was granted sanctuary in the American embassy in Beijing; he remained for more than a year.

 The man who brought Chongqing Communist Party Chief Bo Xilai down was denied political asylum from the U.S. consulate in Chengdu. The WSJ's Deborah Kan speaks to China Editor Andy Browne on why Wang Lijun didn't qualify for diplomatic protection.
.With Mr. Wang, however, asylum or some sort of refugee status was never seriously an option, said administration officials briefed on the case.

Chinese officials detained Mr. Wang after he left the embassy, and according to Chinese media, he hasn't been seen since. In the past, some foreign nationals, such as Mr. Fang, were granted safe haven in U.S. missions in part due to concerns they would face persecution if returned to local authorities. The same case could appear to be have been made for Mr. Wang, though the U.S. officials have maintained that they were guarding Mr. Wang's safety by turning him over to central authorities.

Getting Shelter | U.S. asylum guidelines
Asylum may be requested by those who have suffered, or fear they will suffer, persecution due to their race, religion or nationality, membership in a social group or political opinion.
Asylum can be granted only to those in the U.S. or at a point of entry.
Applicants can be barred for assisting in the persecution of others, committing nonpolitical crimes or being convicted of serious crimes in the U.S.
Temporary refuge at a U.S. post or embassy abroad may be granted if an applicant is in imminent danger of persecution or physical harm.
Temporary refuge may be denied if applicants simply wish to immigrate to the U.S. or are seeking to evade local law; if granting refuge would endanger the embassy's security; or if the State Department instructs the post not to do so.
Source: State, Homeland Security Department; WSJ Research
.Current and former U.S. officials say Mr. Wang's case was far different from Mr. Fang's, and say they see little reason on human rights grounds for sheltering a local police chief who was allegedly offering details of local corruption.

By dashing to the U.S. consulate, Mr. Wang risks charges of treason in China, a crime that carries a long jail sentence and possibly death.

In 2008, China executed a Chinese biomedical researcher convicted of passing military documents and information about a Chinese leader to Taiwan.

China is obsessed about state secrecy—even the leaking of routine economic data is regarded as a grave offense—and analysts say Beijing would have been alarmed at a pile of internal Chinese documents relating to a senior leader and internal political and security issues falling into American hands.

Analysts say the U.S. State Department, by stressing that Mr. Wang left the consulate of his own accord, was clearly sensitive to the human rights dimensions of the case.

Mr. Wang himself is widely believed to have fled to the consulate because he feared for his life after falling out with Mr. Bo. His main concern, according to many accounts, was to leave the consulate in the custody of officials from Beijing, rather than Chongqing.

Candidates for asylum must not be suspected of committing criminal acts or being involved in politically motivated violence, according to U.S. officials and government regulations. American diplomats are prevented from offering political asylum to a foreign national until the person is physically inside the U.S. or at a port of entry.

The State Department came to believe that as Chongqing police chief, Mr. Wang had played an "enforcer" role in carrying out some of the more controversial policies promoted by his then-boss, Bo Xilai, the megacity's top Communist Party official, according to U.S. officials. During a 30-hour stay at the American consulate in Chengdu, Mr. Wang gave U.S. diplomats information about the death of a British businessman, Neil Heywood, last year in China, according to U.S. and British officials.

Enlarge Image

CloseReuters
 
Ex-Chongqing police chief Wang.
."This was a policy enforcer for a governor, not some freedom fighter," said a senior U.S. official briefed on the case.

Had the U.S. considered providing refuge to Mr. Wang, it could have led to an international controversy just days before Chinese Vice President Xi Jinping, who is expected to become the country's next leader, was scheduled to visit the U.S.

The Obama administration's handling of Wang Lijun has become politically sensitive for the White House in other respects, however. Republican lawmakers are demanding that the State Department hand over documents concerning Mr. Wang's case, arguing that if offered formal asylum, the police chief could have provided invaluable intelligence on China and the Communist Party.

Congressional panels are seeking clarity. A spokesman for Ileana Ros-Lehtinen (R.-Fla.), chairwoman of the House Foreign Affairs Committee, said Monday that her committee has yet to receive any of the information requested from the State Department in February.

Mr. Wang's case has roiled China. Mr. Bo was a rising political star and a potential political leader in Beijing. Now, the Chinese government has stripped Mr. Bo of his titles and detained his wife, Gu Kailai, and is formally investigating her for murder. Mr. Wang was handed over to central Chinese authorities, say U.S. officials, who add they are unsure of his current status.

The White House hasn't provided a definitive account of the depth and timing of its involvement in the Wang affair. Administration officials said that members of the National Security Council staff were told of the case while Mr. Wang was staying at the American consulate in Chengdu this February, but they say President Barack Obama wasn't briefed until Mr. Wang had left the consulate. They have declined to say exactly when the president was first briefed.

The Obama administration could face another fateful decision in the coming months concerning Mr. Bo's son, Bo Guagua, who has been studying at Harvard. State Department officials wouldn't discuss the son's prospects on Monday but said: "He is a student in good standing at Harvard … You can draw your own conclusions from that."

The U.S. has a long list of guidelines for dealing with so-called "walk-ins"—people who show up at U.S. embassies, consulates or other buildings overseas seeking the protection of the United States. According to a 2009 State Department cable obtained by Wikileaks, the U.S. has two main priorities for such cases: keeping its diplomatic outposts secure and obtaining intelligence.

The 10-page document advises diplomats to tell walk-ins seeking refuge that the post can't ensure their safe conduct out of the host country, their safety within their own country or their entry into the U.S.

Perhaps most tellingly for Mr. Wang, the cable emphasizes that temporary status "may never be granted to foreign nationals who simply wish to immigrate to the United States or evade local criminal law; if granting refuge would put post security in jeopardy; or if the Department instructs post not to do so."

In Mr. Wang's case, the government appears to have decided early on that he wasn't an intelligence asset like, for example, a Soviet KGB defector may have been in an earlier era. The cable also instructs that temporary refugee status "should be terminated as soon as circumstances permit.''

It is rare but possible for the Department of Homeland Security to "parole'' a foreign national into the United States in extraordinary cases, for individuals of special interest to the United States, when a walk-in is in immediate danger, or when the case is "politically sensitive,'' the cable states.

U.S. administrations have taken diplomatic risks in handling Chinese walk-ins in the past.

In 1989, after Mr. Fang was housed in the American embassy, there were then negotiations between the George H.W. Bush administration and Chinese leader Deng Xiaoping. Ultimately, the dissident and his wife were allowed to travel on medical grounds to the U.S., where he settled in Arizona before his death earlier this month.

U.S. officials on Monday stressed that Wang Lijun was no Fang Lizhi.

Jim Tom Haynes, a Washington-based immigration lawyer, said Mr. Wang's attempt to get asylum or refugee status struck him as "far-fetched," particularly because the case appears to center around domestic Chinese matters. U.S. diplomats, for their part, "probably don't want to encourage this sort of thing either, because it would get very messy diplomatically. The last thing you would want is a flood of people seeking refuge in your embassy," he said.

—Carol E. Lee
and Andrew Browne
contributed to this article.

[Crafty_Dog]

Blind Chinese activist Chen Guangcheng will remain in China under a deal struck between Washington and Beijing and will attend school, according to a U.S. official, 10 days after his escape from home confinement and flight to U.S. protection pressured U.S.-China relations.

The deal potentially resolves a thorny diplomatic issue one day ahead of high-level talks between senior Chinese and U.S. leaders, though China on Wednesday demanded an apology over the matter. But it raises questions over how the U.S. will guarantee the safety of Mr. Chen – who has described abuse under de facto house arrest for the past 19 months -- and to what degree Beijing will allow him to resume his activist work.

"I am pleased that we were able to facilitate Chen Guangcheng's stay and departure from the U.S. embassy in a way that reflected his choices and our values," U.S. Secretary of State Hillary Clinton said in a statement, adding that she spoke with Mr. Chen herself.

"Mr. Chen has a number of understandings with the Chinese government about his future, including the opportunity to pursue higher education in a safe environment. Making these commitments a reality is the next crucial task. The United States government and the American people are committed to remaining engaged with Mr. Chen and his family in the days, weeks, and years ahead," the statement continued.

Mr. Chen, a vocal opponent of forced abortions under China's one-child policy, will be relocated to a different part of China, the U.S. official said on Wednesday, adding that he will be allowed to attend a university "like any other student." The official stressed that Mr. Chen didn't request asylum and made clear he wanted to stay in China.

Enlarge Image

CloseJordan Pouille/Agence France-Presse/Getty Images
 
Chinese activist Chen Guangcheng is seen in a wheelchair pushed by a nurse at a hospital in Beijing.
.Read More

China Real Time: Global Times Breaks Media Silence on Chen
Earlier: Daring Escape Brings Attention
.The U.S. urged the Chinese government not to punish those who helped him and said that Beijing had pledged to investigate local officials who Mr. Chen has alleged mistreated him. China's Foreign Ministry didn't respond to requests for comment late Wednesday.

"We think we have helped him secure a better future," said one U.S. official, while a second official added, "he will have an opportunity to continue to make a difference."

Officials said that Mr. Chen entered the U.S. embassy on Thursday with the help of embassy personnel, in their first confirmation of claims by Chinese human-rights activists who had spoken with Mr. Chen. U.S. officials said they helped Mr. Chen on humanitarian grounds because he injured his foot while escaping, adding that he scaled no fewer than eight walls during his flight.

On Wednesday Mr. Chen left the embassy to seek medical attention and to be reunited with his family, which he left behind when he fled his home in China's eastern Shandong province. Mr. Chen was at Beijing's Chaoyang Hospital on Wednesday. Police were ousting reporters from the facility Wednesday afternoon.

U.S. officials said Mr. Chen expressed a desire to speak with Mrs. Clinton while on the way to the hospital. They had a brief phone conversation, and Mr. Chen told her, in broken English, "I want to kiss you," according to officials.

U.S. officials said the issue could linger ahead of talks this week but suggested the deal showed that relations between Washington and Beijing had made progress. "This was not easy for the Chinese government," said one official.

Meanwhile, China's state-run Xinhua news agency said the government demanded an apology from U.S. officials over the matter.

"It should be pointed out that Chen Guangcheng, a Chinese citizen, was taken by the U.S. side to the U.S. embassy in Beijing via abnormal means, and the Chinese side is strongly dissatisfied with the move," said Chinese Foreign Ministry spokesman Liu Weimin, according to Xinhua.

He added that China demands that the U.S. "thoroughly investigate the event, hold relevant people accountable and ensure that such an event does not happen again," according to Xinhua.

A senior U.S. official declined to address the demand for an apology but said "this was an extraordinary case, involving exceptional circumstances, and I do not anticipate that it will be repeated." The official added, "we intend to work closely inside the U.S. government to fully insure that our policies are consistent with our values."

Despite the apology issue, an agreement on Mr. Chen's fate potentially ends a stumbling block between the U.S. and China one day before the beginning of high-level talks. Mrs. Clinton and Treasury Secretary Timothy Geithner arrived in Beijing on Wednesday to hold two days of talks with their Chinese counterparts on economic and strategic matters.

Experts had said Mr. Chen's plight could distract from or derail talks. U.S. officials over the weekend sent U.S. Assistant Secretary of State Kurt Campbell, the State Department's top Asia envoy, to Beijing to help defuse the issue ahead of the talks.

Enlarge Image

CloseAssociated Press
 
A hospital security guard tries to restrain the photographer at the gate of Chaoyang Hospital in Beijing where Chen Guangcheng was staying on Wednesday.
.But the deal may raise questions about how the U.S. would guarantee the safety of an activist who has said he was beaten and mistreated since his home confinement began in September 2010.

At least one prominent Chinese dissident said Wednesday that he didn't believe that was a concern. "There's no way because this has already become an international issue," artist Ai Weiwei said, adding that he thought the handling of Mr. Chen's case demonstrated a "maturing" in the U.S.-China relationship.

Mr. Ai did say, however, that he though Mr. Chen's ability to continue with the legal advocacy he was pursuing before he was imprisoned would be limited. "If he does it, it will be restricted," the artist said.

News of Mr. Chen's release set off a flurry of activity on Chinese social media sites despite blocks on use of his name or related terms. Many users of Twitter-like microblogging site Sina Weibo welcomed the notion that the activist would be allowed to stay in China, but others expressed skepticism over the conditions of his release.

"Phrase of the year: left of his own volition," wrote Southern Metropolis Daily reporter Feng Xiang, an apparent reference to former Chongqing police chief Wang Lijun, who spent a night in the U.S. consulate in the city of Chengdu in February. Mr. Wang's stay in the Chengdu consulate began a series of events that led to the toppling of high-flying Chinese Communist Party official Bo Xilai in March.

Others mocked the Chinese Foreign Ministry's contention in announcing Mr. Chen's release that "China is a country under rule of law, and its citizens' legitimate rights and interests are protected by the Constitution and laws."

"We're paying a lot of attention, but we really don't understand," wrote on user from the coastal city of Xiamen. "Are we rule of law or rule by law?"

Blinded after a childhood illness, Mr. Chen overcame illiteracy and audited law classes on the way to becoming a locally celebrated "barefoot lawyer." Early in his career, he advocated on behalf of people with disabilities, later making a splash with a high-profile campaign against forced abortions being carried out in his home province under the one-child policy.

After his family-planning campaign led to the firing of local officials, Mr. Chen was detained by local authorities. In 2006, he was sentenced to four years in prison for disturbing the public order, charges supporters say were trumped up.

Upon his release from prison in 2010, he and his family were confined to their home, watched over by plainclothes guards who sometimes beat them severely, he and other activists have said.

Mr. Chen's plight turned him into a cause celebre among activists and others, a number of whom tried to visit him, which occasionally resulted in confrontations with guards. "Batman" actor Christian Bale was roughly turned away when he tried to visit Mr. Chen in December.

—Brian Spegele contributed to this article.

[Crafty_Dog]

At the moment it is looking like my previous subject heading was on target; despite the duplicity from Secy Clinton and the Embassy, the assertions that Chen chose to leave the embassy are contradicted by the apparent threats to his family by the regime.  Now Chen says that he and his family are in danger and wish to leave China but apparently America's tradition of standing for oppressed dissidents comes in second to financing Baraq's baccanalia of spending.

[Crafty_Dog]

second post

By MINXIN PEI
Nowadays Chinese leaders seem too busy putting out fires to think about their regime's long-term survival. Last month, they had to dispatch Politburo member Bo Xilai in a messy power struggle on the eve of a leadership transition. This past week, the daring escape of blind rights activist Chen Guangcheng from illegal house arrest to the U.S. Embassy in Beijing provoked another crisis. When rulers of one of the most powerful countries in the world have to worry about the defiant acts of a blind man, it's high time for them to think the unthinkable: Is the Communist Party's time up?

Asking such a question seems absurd on the surface. If anything, the party has thrived since its near-death experience in Tiananmen in 1989. Its ranks have swelled to 80 million. Its hold on power, bolstered by the military, secret police and Internet censors, looks unshakable.

Enlarge Image

CloseAFP/Getty Images
 
Rights activist Chen Guangcheng in a wheelchair at Beijing's Chaoyang hospital, May 2
.Yet, beneath this façade of strength lie fundamental fragilities. Disunity among the ruling elites, rising defiance of dissidents, mass riots, endemic official corruption—the list goes on. For students of democratic transitions, such symptoms of regime decay portend a systemic crisis. Based on what we know about the durability of authoritarian regimes, the Chinese Communist Party's rule is entering its most perilous phase.

To appreciate the mortal dangers lying ahead for the party, look at three numbers: 6,000, 74 and seven. Statistical analysis of the relationship between economic development and survival of authoritarian regimes shows that few non-oil-producing countries can sustain their rule once per capita GDP reaches $6,000 in purchasing power parity (PPP). Based on estimates by the International Monetary Fund, Chinese GDP per capita is $8,382 in PPP terms ($5,414 in nominal terms).

This makes China an obvious authoritarian outlier. Of the 91 countries with a higher per capita GDP than China now, 68 are full democracies, according to Freedom House, 10 are "partly free" societies, and 13 are "not free." Of the 13 countries classified as "not free," all except Belarus are oil producers. Of the 10 "partly free" countries, only Singapore, Tunisia and Lebanon are not oil producers. Tunisia has just overthrown its long-ruling autocracy. Prospects of democracy are looking brighter in Singapore. As for Lebanon, remember the Cedar Revolution of 2005?

So the socioeconomic conditions conducive to a democratic breakthrough already exist in China today. Maintaining one-party rule in such a society is getting more costly and soon will be utterly futile.

This brings us to the second number, 74—the longest lifespan enjoyed by a one-party regime in history, that of the Communist Party of the Soviet Union (1917-1991). One-party rule in Mexico had only a slightly shorter history, 71 years (1929-2000). In Taiwan, the Kuomintang maintained power for 73 years if we count its time as the ruler of the war-torn mainland before it fled to Taiwan in 1949.

Related Video
 Human Rights Watch director of global initiatives Minky Worden on the deal the U.S. struck with Beijing over Chinese activist Chen Guangcheng. Photo: Getty Images
.
.Social scientists have yet to discover why one-party regimes, arguably the most sophisticated of all modern-day autocracies, cannot survive beyond their seventh decade in power. What is important to note is that systemic crises in such regimes typically emerge about a decade before their ultimate fall. In the Soviet Union, it was the combination of the stagnation of the Brezhnev era and the ill-fated invasion of Afghanistan. In Mexico, the stolen presidential election of 1988 delegitimized the Institutional Revolutionary Party's rule.

The Chinese Communist Party has governed for 62 years. If history offers any guidance, it is about to enter its crisis decade, and probably has at most 10-15 years left on its clock.

One possible reason for the demise of one-party rule is the emergence of a counter-elite, composed of talented and ambitious but frustrated individuals kept out of power by the exclusionary nature of one-party rule. To be sure, the party has worked hard to co-opt China's best and brightest. But there are limits to how many top people it can absorb. So the party has a problem summarized by this ratio: 7:1.

Chinese colleges and universities graduate seven million bachelor degree-holders each year. The party admits one million new members with a college education or higher each year, thus leaving out roughly six million newly minted university graduates. Since party membership still is linked to the availability of economic opportunities, a sizable proportion of this excluded group is bound to feel that the system has cheated them.

Many will turn their frustrations against the party. Over the next decade, this group could grow into tens of millions, forming a pool of willing and able recruits for the political opposition.

The odds do not look good for those in Beijing who want to maintain the status quo indefinitely. They must begin thinking about how to exit power gracefully and peacefully. One thing the party should do immediately is end the persecution of potential opposition leaders like Mr. Chen and Liu Xiaobo, the Nobel Peace Prize winner now in Chinese prison. The party will need them as negotiating partners when the transition to democracy eventually begins.

Mr. Pei is a professor of government at Claremont McKenna College.

[Crafty_Dog]

This much is clear: Beijing reached an agreement Wednesday with the U.S. under which blind legal activist Chen Guangcheng left the U.S. Embassy. However, the details of the deal, including whether Mr. Chen was coerced to accept by Chinese threats to his family, remain murky.

Secretary of State Hillary Clinton, in Beijing for the Strategic and Economic Dialogue talks on Thursday, said that the outcome "reflected his choices and our values," and was based on "a number of understandings with the Chinese government."

There's good reason to doubt that Beijing will honor those understandings. While local authorities did the dirty work of keeping Mr. Chen under illegal house arrest in rural Shandong province, the central government was complicit. Nobody should be under the illusion that village thugs defied Beijing's wishes for 19 months. As one Chinese commentator put it, "No matter how strong Dongshigu Village is, it can't be stronger than [defrocked Bo Xilai's] Chongqing."

Related Video
 Human Rights Watch director of global initiatives Minky Worden on the deal the U.S. struck with Beijing over Chinese activist Chen Guangcheng. Photo: Getty Images
.
.The good news is that Mr. Chen has occupied the moral high ground in China's public debate. The case hinges not only on universal concepts of human rights, but also the Chinese government's failure to follow its own laws. The persecution of a blind man and his innocent family exposed the Communist Party's mafia mentality of attacking anyone who dares to challenge its injustice.

This deal, flawed as it may be, should at least improve Mr. Chen's living conditions for a time, and it allows the U.S. to take an ongoing interest in his welfare. American concern should also focus on those who helped Mr. Chen escape his captors. Some have been detained, even though the police concede they broke no laws.

The Chinese government Wednesday deflected attention from Mr. Chen's mistreatment by criticizing the U.S. for the "abnormal means" by which he entered the U.S. Embassy. A Foreign Ministry spokesman's demands for a U.S. investigation and apology, widely repeated in the state-run media, are transparent efforts to save face. Beijing is on the back foot as Mr. Chen is already one of the most effective activists in China on human rights and the rule of law. Now he will garner even more attention.

While this case is unusual, it sets an important precedent in U.S.-China relations. Nobody doubts the importance of U.S.-Chinese cooperation on a range of issues, but that cooperation becomes counterproductive when it comes at the expense of the core values America embodies and the Chinese people admire. As for Beijing, it will only take its place in the world as a respected power when it also honors those values—and its own laws.

[Crafty_Dog]

By JON HUNTSMAN
The recent drama in Beijing over dissident Chen Guangcheng illuminates two of the most important characteristics of today's China and its political system. First, despite China's economic success and growing regional influence, the leadership of the Chinese Communist Party is profoundly insecure. Second, the Chinese people are increasingly demanding a more transparent and fair society.

The Communist Party's insecurity has been amplified by the 18th Party Congress, an unprecedented leadership transition taking place this fall with a backdrop of domestic political scandal, social unrest, uncertainties about the Chinese growth model, and increased tensions with the United States. The party fears that liberalization would unleash centrifugal forces that would threaten its authority. Yet people such as Mr. Chen, artist and dissident Ai Wei Wei, Nobel Peace Prize winner Liu Xiaobo, who is now imprisoned in China, and so many others provide a glimpse of China's potential if it were to unlock the talents of its people.

In crafting an effective approach to the U.S.-China relationship, we need to understand China and all of its complexities—not engage in hyperbole or wishful thinking. Saying that the U.S.-China relationship is among the most important in the world today is not a statement meant to set China above our allies on our priority list, nor does it convey any aspiration for a "G-2" management of global problems. Rather, it is recognition of what is at stake.

Enlarge Image

CloseAFP/Getty Images
 
A banner in support of Chinese activist Chen Guangcheng, Hong Kong, May 4.
.There is no other relationship in the world that, if mismanaged, carries greater long-term negative consequences for the U.S., the Asia-Pacific region, and the world. By contrast, wise stewardship of the relationship will make us and our allies safer, wealthier and more confident about global stability in the future.

The best hope for sustained bilateral cooperation will come from strategically identifying shared interests and operating from a position of shared values. Unfortunately, in today's China those values we share are found mostly among people like Mr. Chen, and not in the Communist Party or the government.

America's policy toward China should rest on the following pillars:

The U.S. must deal with China from a position of strength. This means getting our economic house in order by undertaking difficult structural reforms. China will approach all interactions with the U.S. by first sizing up relative strength and leverage. If we remain on our present course of fiscal irresponsibility, innovation-stifling policies and political paralysis, we can anticipate greater Chinese assertiveness and foreign policy adventurism.

Economics and trade must drive our foreign policy and Asia strategy. Chinese leaders have demonstrated that they want trade to be the lifeblood of their ties to the region. Today Beijing is the leading trading partner of most of our regional allies. Given the scale of the Chinese market, we should prudently consider the second-order effects of those relationships changing the regional incentive structure. Washington must get back in the game of robust trade liberalization. Beyond the Trans-Pacific Partnership talks, we should be pursuing free trade agreements with Japan, Taiwan and India, and allowing American businesses to enter Burma.

We should renew our ties to key allies, focusing on joint endeavors that hedge against some of the more difficult contingencies we could face in the region from an aggressive China and People's Liberation Army. There is vast potential for cooperative problem solving among countries that do share our values, and this "outside-in" approach to Beijing will demonstrate the benefits to being a friend of the United States. We can clearly communicate to our allies through our actions that the U.S. will be able to project power in the region despite Chinese opposition.

Values matter. We have an opportunity to shape outcomes by living up to our ideals and demonstrating we are worthy of the region's admiration and emulation. This approach will not only be consistent with the aspirations of many in China, but it will also leave the door open for a truly strong U.S.-China relationship based on shared values—should leaders in the Communist Party eventually embrace liberal reforms.

While our national leaders must try to bridge the communication gap in the near term, it will ultimately be everyday commercial, cultural and social interactions that will transform bilateral ties. I believe our peoples are more alike than different, and can see a future China where the likes of Chen Guangcheng are celebrated by both the people and the state rather than persecuted. Meanwhile, we should creatively engage constituencies beyond the government in Beijing and allow a multitude of relationships to flourish.

We must work with China on shared interests, while remaining vigilant to the inevitably competitive nature of our relationship for the foreseeable future. I've seen the competition up close, and I believe we can succeed with the right policies and leadership.

Chen Guangcheng has given us an opening that we can either see as a source of conflict or as an opening for expanding our dialogue on issues that increasingly matter to so many in China. The world will be watching.

Mr. Huntsman was U.S. ambassador to China from 2009-2011. A former governor of Utah and candidate for the 2012 Republican presidential nomination, he is now chairman of the Huntsman Cancer Foundation.

[Crafty_Dog]

Stratfor

The Chinese Marine Surveillance (CMS) announced May 9 that 36 new vessels are expected to join its surveillance fleet by 2013. The CMS fleet's new ships reportedly include seven 1,500-ton ships, 15 1,000-ton ships and 14 600-ton ships. The CMS is one of five Chinese maritime law enforcement agencies, and is tasked with maintaining China's presence in disputed waters and enforcing and surveilling Beijing's claimed economic exclusive zone, which is extensive and difficult to monitor. The new shipbuilding announcement comes while China is locked in a standoff with the Philippines over Huangyan Island in the South China Sea. The standoff began April 8 when two CMS ships blocked a Philippine warship from boarding eight Chinese fishing vessels anchored in the contested region. While both Manila and Beijing have publicly committed to resolving the standoff diplomatically, the situation remains tense and Chinese authorities say they are prepared for an escalation by Manila. The growing capabilities of China's maritime enforcement agencies allow Beijing to strengthen its presence within China's claimed maritime territory and to better position itself to respond to any clash, such as the current Huangyan Island standoff. China's bolstered maritime enforcement fleet and assertive maneuvering will increase the likelihood of maritime confrontation in a region rife with other claimants.

[Crafty_Dog]

Summary

 
ROMEO GACAD/AFP/Getty Images

A Filipino man harvests bananas in Mindanao

Philippine President Benigno Aquino III said May 14 that banana growers should seek alternatives to the Chinese market. The statement follows May 9 reports that Chinese customs agents would begin inspecting banana and pineapple shipments from the Philippines for "harmful organisms." Under the heightened scrutiny, Chinese customs agents have impounded ships carrying bananas from the Philippines, causing the cargo to spoil at the expense of Philippine growers. The tensions over China's import restrictions on Philippine fruit come as travel agencies in China and Taiwan stop Chinese tourism in the Philippines due to the Scarborough Shoal maritime dispute.

As the third-largest destination for Philippine exports, China possesses significant economic leverage over the relatively small island country. It will use this leverage to persuade the Philippines to relax its claims in the South China Sea.

Analysis:

China seems to be focusing on sectors large, strategic and urgent enough (fruit spoils quickly, and there are no reserves to mitigate a dip in tourism) to send Manila a message without seriously damaging the Philippine and Chinese economies. By contrast, targeting things like electronics or machine parts would harm both economies and risk a regional backlash against China.

Bananas are the Philippines' most important fruit export, providing a major source of employment on the poor and politically unstable island of Mindanao. Bananas account, however, for just about 1 percent of the Philippines' total export value. China is currently the second-largest destination of Philippine bananas after Japan, importing $75 million worth of the fruit in 2011 -- 16 percent of Philippine banana exports. Thought it is a distant second behind Japan, which consumes more than half of Philippine banana exports, China is the fastest growing market for Philippine bananas. Imports more than doubled each year from 2009 to 2011. Even when Philippine exports to other countries dipped drastically after El Nino hit in 2010, exports to China leapt from $14 million to $33 million. This rapid growth and a declining or relatively steady demand in other markets like South Korea and Iran suggest that Philippine growers will not willingly give up the market in China.

Bolstering this perception, the president of the Pilipino Banana Growers and Exporters Association (PBGEA) warned that losing the Chinese market could have political, social and economic implications. He noted that up to 200,000 workers would be affected by the current situation, the first such incident since the Philippines started exporting bananas to China in 2001. The PBGEA has played an important role in developing and consolidating the country's banana growers. As such, it constitutes the largest unified voice in the Philippine fruit industry and the strongest potential lobby to affect national policy.

PBGEA's efforts to develop Mindanao's banana industry have paid off in recent years, with the Philippines emerging as the third-largest exporter worldwide and the largest by far in Asia. Most Philippine bananas are grown on Mindanao. The island long has been a hotbed for political and ethnic struggle, with several competing separatist groups inhabiting different parts of the island. Poor and relatively underpopulated, the island embodies the Philippines' struggle to integrate its rural, agriculture-based and heavily indigenous southern islands with the more prosperous urban north. While these tensions are not directly tied to the island's banana industry (the majority of bananas are grown in Davao del Norte, which is not occupied by separatist groups), they form part of a larger political context that Manila treats with caution.

Beijing may hope its tougher banana inspections and tourism boycott will impel the Philippine agriculture and tourism lobbies to coax Manila into toning down its maritime territorial rhetoric. Despite the relatively small value of banana exports compared to electronics or machine parts, the PBGEA plays a central role in the country's key agricultural export product. That and bananas' important Mindanao employer may give the PBGEA -- and other parts of the country's agriculture sector that fear wider Chinese sanctions -- a significant say in crafting Manila's response to China.

This would allow Beijing to resolve a territorial dispute without acting overly aggressive toward the Philippines, a move that could deprive third parties, including the United States, of any reason to intervene. That Manila has joined Beijing in denying any connection between banana import restrictions and the Scarborough Shoal affair helps efforts to cast the spat as a trade issue rather than a political issue, as does a Philippine Department of Agriculture delegation's visit to China to seek a resolution to the issue. (Representatives of that department have said the particular bacteria the Chinese claimed to find do not even typically affect bananas.)

In some ways, China's strategy toward the Philippines is reminiscent of its rare earth elements export ban, which was seen as directed against Japan. It may extend this strategy of using less overt ways of reinforcing its territorial claims against countries with competing claims in the South China Sea.

[Spartan Dog]

Posted on behalf of Crafty Dog...

[bigdog]

http://www.defensenews.com/article/20120605/DEFREG03/306050016/India-Japan-Conduct-First-Joint-Naval-Exercises?odyssey=tab%7Ctopnews%7Ctext%7CFRONTPAGE

NEW DELHI — As part of their increased defense ties, the navies of India and Japan will hold their first joint exercises June 9-10 in Japanese waters.

The joint naval exercises follow agreements reached during the visit of Indian Defense Minister A.K. Antony to Japan in November 2011. Both navies will also conduct routine passage exercises during the visit of Japanese ships to Indian ports this year.

[bigdog]

http://www.defensenews.com/apps/pbcs.dll/article?AID=2012307080006

[Crafty_Dog]

How very odd.  I wonder what is going on beneath the surface here.

[DougMacG]

Yes, a very odd report.  "I wonder what is going on beneath the surface here." 

Placating the opportunistic oppressors who backstab us around the globe it would appear, while elsewhere we backstab our real friends and allies.

From the article: "Calibrating a long-range China policy may be the greatest challenge for the U.S. administration’s pivot to the Asia-Pacific region."

I would add that dealing effectively with the current, unelected regime of China is, to me, only a short term goal.

At what point in a nation's economic development do a billion plus people deserve the basic human right of consensual government?  That might have enormous foreign policy and defense implications for the U.S.  I haven't heard much from this administration on the world stage about that, no tear down this wall speech from the Nobel prize winner in chief, though he did report Arizona to the UN for oppression.

[bigdog]

http://www.defensenews.com/apps/pbcs.dll/article?AID=2012307080006

This http://www.politico.com/news/stories/0712/78409.html should be read in tandem with the above article.

[Russ]

China staked its modern claim to control of the sea in the waning days of the Chinese Civil War. Since most of the other claimant countries were occupied with their own independence movements in the ensuing decades, China had to do little to secure this claim. However, with other countries building up their maritime forces, pursuing new relationships and taking a more active stance in exploring and patrolling the waters, and with the Chinese public hostile to any real or perceived territorial concessions on Beijing's part, Deng's quiet approach is no longer an option.

The Paradox of China's Naval Strategy
July 17, 2012 | 0859 GMT

Stratfor
By Rodger Baker and Zhixing Zhang

Over the past decade, the South China Sea has become one of the most volatile flashpoints in East Asia. China, Vietnam, the Philippines, Malaysia, Brunei and Taiwan each assert sovereignty over part or all of the sea, and these overlapping claims have led to diplomatic and even military standoffs in recent years.

Because the sea hosts numerous island chains, is rich in mineral and energy resources and has nearly a third of the world's maritime shipping pass through its waters, its strategic value to these countries is obvious. For China, however, control over the South China Sea is more than just a practical matter and goes to the center of Beijing's foreign policy dilemma: how to assert its historic maritime claims while maintaining the non-confrontational foreign policy established by former Chinese leader Deng Xiaoping in 1980.

China staked its modern claim to control of the sea in the waning days of the Chinese Civil War. Since most of the other claimant countries were occupied with their own independence movements in the ensuing decades, China had to do little to secure this claim. However, with other countries building up their maritime forces, pursuing new relationships and taking a more active stance in exploring and patrolling the waters, and with the Chinese public hostile to any real or perceived territorial concessions on Beijing's part, Deng's quiet approach is no longer an option.

Evolution of China's Maritime Logic
China is a vast continental power, but it also controls a long coastline, stretching at one time from the Sea of Japan in the northeast to the Gulf of Tonkin in the south. Despite this extensive coastline, China's focus has nearly always turned inward, with only sporadic efforts put toward seafaring and even then only during times of relative security on land.

Traditionally, the biggest threats to China were not from sea, except for occasional piracy, but rather from internal competition and nomadic forces to the north and west. China's geographic challenges encouraged a family-based, insular, agricultural economy, one with a strong hierarchal power structure designed in part to mitigate the constant challenges from warlords and regional divisions. Much of China's trade with the world was undertaken via land routes or carried out by Arabs and other foreign merchants at select coastal locations. In general, the Chinese chose to concentrate on the stability of the population and land borders over potential opportunities from maritime trade or exploration, particularly since sustained foreign contact could bring as much trouble as benefit.

Two factors contributed to China's experiments with naval development: a shift in warfare from northern to southern China and periods of relative national stability. During the Song dynasty (960-1279), the counterpart to the horse armies of the northern plains was a large inland naval force in the riverine and marshy south. The shift to river navies also spread to the coast, and the Song rulers encouraged coastal navigation and maritime trade by the Chinese, replacing the foreign traders along the coast. While still predominately inward-looking during the Yuan dynasty (1271-1368) under the Mongols, China carried out at least two major naval expeditions in the late 13th century -- against Japan and Java -- both of which ultimately proved unsuccessful. Their failure contributed to China's decision to again turn away from the sea. The final major maritime adventure occurred in the early Ming dynasty (1368-1644), when Chinese Muslim explorer Zheng He undertook his famous seven voyages, reaching as far as Africa but failing to use this opportunity to permanently establish Chinese power abroad.

Zheng He's treasure fleet was scuttled as the Ming saw rising problems at home, including piracy off the coast, and China once again looked inward. At about the same time that Magellan started his global expedition in the early 1500s, the Chinese resumed their isolationist policy, limiting trade and communication with the outside and ending most consideration of maritime adventure. China's naval focus shifted to coastal defense rather than power projection. The arrival of European gunboats in the 19th century thoroughly shook the conventional maritime logic of Chinese authorities, and only belatedly did they undertake a naval program based on Western technology.

Even this proved less than fully integrated into China's broader strategic thinking. The lack of maritime awareness contributed to the Qing government's decision to cede its crucial port access at the mouth of the Tumen River to Russia in 1858, permanently closing off access to the Sea of Japan from the northeast. Less than 40 years later, despite building one of the largest regional fleets, the Chinese navy was smashed by the newly emergent Japanese navy. For nearly a century thereafter, the Chinese again focused almost exclusively on the land, with naval forces taking a purely coastal defense role. Since the 1990s, this policy has slowly shifted as China's economic interconnectedness with the world expanded. For China to secure its economic strength and parlay that into stronger global influence, the development of a more proactive naval strategy became imperative.

Interpreting the 'Nine-Dash Line'
To understand China's present-day maritime logic and its territorial disputes with its neighbors, it is necessary to first understand the so-called nine-dash line, a loose boundary line demarcating China's maritime claims in the South China Sea.

The nine-dash line was based on an earlier territorial claim known as the eleven-dash line, drawn up in 1947 by the then-ruling Kuomintang government without much strategic consideration since the regime was busy dealing with the aftermath of the Japanese occupation of China and the ongoing civil war with the Communists. After the end of the Japanese occupation, the Kuomintang government sent naval officers and survey teams through the South China Sea to map the various islands and islets. The Internal Affairs Ministry published a map with an eleven-dash line enclosing most of the South China Sea far from China's shores. This map, despite its lack of specific coordinates, became the foundation of China's modern claims, and following the 1949 founding of the People's Republic of China, the map was adopted by the new government in Beijing. In 1953, perhaps as a way to mitigate conflict with neighboring Vietnam, the current nine-dash line emerged when Beijing eliminated two of the dashes.


The new Chinese map was met with little resistance or complaint by neighboring countries, many of which were then focused on their own national independence movements. Beijing interpreted this silence as acquiescence by the neighbors and the international community, and then stayed largely quiet on the issue to avoid drawing challenges. Beijing has shied away from officially claiming the line itself as an inviolable border, and it is not internationally recognized, though China regards the nine-dash line as the historic basis for its maritime claims.

Like other claimant countries such as Vietnam and the Philippines, China's long-term goal is to use its growing naval capabilities to control the islands and islets within the South China Sea and thus the natural resources and the strategic position they afford. When China was militarily weak, it supported the concept of putting aside sovereignty concerns and carrying out joint development, aiming to reduce the potential conflicts from overlapping claims while buying time for its own naval development. Meanwhile, to avoid dealing with a unified bloc of counterclaimants, Beijing adopted a one-to-one negotiation approach with individual countries on their own territorial claims, without the need to jeopardize its entire nine-dash line claim. This allowed Beijing to remain the dominant partner in bilateral negotiations, something it feared it would lose in a more multilateral forum.

Despite the lack of legal recognition for the nine-dash line and the constant friction it engenders, Beijing has little ability now to move away from the claim. With the rising international attention and regional competition over the South China Sea, the Chinese public -- which identifies the waters within the nine-dash line as territorial waters -- is pressuring Beijing to take more assertive actions. This has left China in an impossible position: When Beijing attempts to portray joint developments as evidence that other countries recognize China's territorial claims, the partner countries balk; when it tries to downplay the claims in order to manage international relations, the Chinese population protests (and in the case of Chinese fishermen, often act on their own in disputed territory, forcing the government to support them rhetorically and at times physically). Any effort to appeal to Beijing's domestic constituency would risk aggravating foreign partners, or vice versa.

Developing a Maritime Policy
The complications from the nine-dash line, the status of domestic Chinese developments and the shifting international system have all contributed to shape China's evolving maritime strategy.

Under former leader Mao Zedong, China was internally focused and constrained by a weak navy. China's maritime claims were left vague, Beijing did not aggressively seek to assert its rights and the independence struggles of neighboring countries largely spared China from taking a stronger maritime stance. China's naval development remained defensive, focused on protecting its shores from invasion. Deng Xiaoping, in concert with his domestic economic reforms in the late 1970s and early 1980s, sought the more pragmatic joint economic development of the East and South China seas, putting aside claims of territorial sovereignty for another time. China's military expenditures continued to focus on land forces (and missile forces), with the navy relegated to a largely defensive role operating only in Chinese coastal waters.

To a great degree, Deng's policies remained in place through the next two decades. There were sporadic maritime flare-ups in the South China Sea, but in general, the strategy of avoiding outright confrontation remained a core principle at sea. China's navy was in no position to challenge the dominant role of the U.S. Navy or to take any assertive action against its neighbors, especially since Beijing sought to increase its regional influence through economic and political means rather than through military force.

But joint development proposals for the South China Sea have largely failed. China's expanded economic strength, coupled with a concomitant rise in its military spending -- and more recently its focus on naval development -- has raised suspicions and concerns among neighboring countries, with many calling on the United States to take a more active role in the region to counterbalance China's rise. The issue of the nine-dash line and territorial claims have also risen in significance because countries had to file their maritime claims under the U.N. Convention on the Law of the Sea, bringing the competing claims a step closer to international arbitration. China, which was a signatory to the treaty largely due to its potential maritime gains in the East China Sea, found itself forced to file numerous counterclaims in the South China Sea, raising alarm in neighboring countries of what was seen as an outright push for regional hegemony.

It was not only counterclaimant nations that considered the Chinese moves troubling. Japan and South Korea are heavily dependent on the South China Sea as an energy transit corridor, and the United States, Australia and India among others depend on the sea for trade and military transit. All these countries saw China's moves as a potential prelude to challenging free access to the waters. China responded with increasingly assertive rhetoric as well as a larger role for the Chinese military in foreign policy decisions. The old policy of non-confrontation was giving way to a new approach.

The Foreign Policy Debate
In 1980, Deng expressed the shape of Chinese foreign policy as one in which China should observe the world, secure its position, deal calmly with foreign affairs, hide its capabilities and bide its time, maintain a low profile and never claim leadership. These basic tenets remain the core of Chinese foreign policy, either as guidelines for action or excuses for inaction. But China's regional and domestic environment has shifted significantly from the early days of Deng's reforms, and China's economic and military expansion has already passed Deng's admonition to hide capabilities and bide time.

Beijing understands that only through a more proactive policy can China expand from a solely land-based power to a maritime power and reshape the region in a manner beneficial to its security interests. Failure to do so could enable other regional states and their allies, namely the United States, to contain or even threaten China's ambitions.

At least four elements of Deng's policies are currently under debate or changing: a shift from noninterference to creative involvement; a shift from bilateral to multilateral diplomacy; a shift from reactive to preventative diplomacy; and a move away from strict nonalignment toward semi-alliances.

Creative involvement is described as a way for China to be more active in preserving its interests abroad by becoming more involved in other countries' domestic politics -- a shift from noninterference to something more flexible. China has used money and other tools to shape domestic developments in other countries in the past, but an official change in policy would necessitate deeper Chinese involvement in local affairs. However, this would undermine China's attempts to promote the idea that it is just another developing nation helping other developing nations in the face of Western imperialism and hegemony. This shift in perception could erode some of China's advantage in dealing with developing nations since it has relied on promises of political noninterference as a counter to Western offers of better technology or more development resources that come with requirements of political change.

China has long relied on bilateral relations as its preferred method of managing its interests internationally. When China has operated within a multilateral forum, it has often shaped developments only by being a spoiler rather than a leader. For example, China can block sanctions in the U.N. Security Council but has rarely proffered a different path for the international community to pursue. Particularly through the 1990s, Beijing feared its relatively weak position left it little to gain from multilateral forums, and instead put China under the influence of the stronger members. But China's rising economic power has shifted this equation.

China is pursuing more multilateral relationships as a way to secure its interests through the larger groups. China's relations with the Association of Southeast Asian Nations, its participation in the Shanghai Cooperation Organization and its pursuit of trilateral summits are all intended to help Beijing shape the policy direction of these blocs. By shifting to the multilateral approach, China can make some of the weaker countries feel more secure and thus prevent them from turning to the United States for support.

Traditionally, China has had a relatively reactive foreign policy, dealing with crises when they emerge but often failing to recognize or act to prevent the crises before they materialize. In places where Beijing has sought access to natural resources, it has often been caught off-guard by changes in the local situation and not had a response strategy prepared. (The division of Sudan and South Sudan is one recent example). Now, China is debating shifting this policy to one where it seeks to better understand the underlying forces and issues that could emerge into conflict and act alone or with the international community to defuse volatile situations. In the South China Sea, this would mean clarifying its maritime claims rather than continuing to use the vague nine-dash line and also more aggressively pursuing ideas for an Asian security mechanism, one in which China would play an active leadership role.

China's stance on alliances remains the same as that put forward by Deng in the 1980s: It does not engage in alliance structures targeted against third countries. This was both to allow China to retain an independent foreign policy stance and to avoid international entanglements due to its alliances with others. For example, Chinese plans to retake Taiwan were scuttled by its involvement in the Korean War, and thus its relations with the United States were set back by decades. The collapse of the Cold War system and the rise of China's economic and military influence have brought this policy under scrutiny as well. Beijing has watched cautiously as NATO has expanded eastward and as the United States has strengthened its military alliances in the Asia-Pacific region. Beijing's non-alliance policy leaves China potentially facing these groups alone, something it has neither the military nor the economic strength to effectively counter.

The proposed semi-alliance structure is designed to counter this weakness while not leaving China beholden to its semi-alliance partners. China's push for strategic partnerships (even with its ostensible rivals) and increased military and humanitarian disaster drills with other nations are part of this strategy. The strategy is less about building an alliance structure against the United States than it is about breaking down the alliance structures that could be built against China by getting closer to traditional U.S. partners, making them less willing to take strong actions against China. In its maritime strategy, Beijing is working with India, Japan and Korea in counterpiracy operations and engaging in more naval exchanges and offers of joint exercises and drills.

Looking Forward
China's world is changing. Its emergence as a major economic power has forced Beijing to rethink its traditional foreign policy. Closest to home, the South China Sea issue is a microcosm of China's broader foreign policy debate. The ambiguity of China's maritime claim was useful when the region was quiet, but it is no longer serving China's purposes, and coupled with the natural expansion of China's maritime interests and naval activity it is instead exacerbating tensions. Old policy tools such as trying to keep all negotiations bilateral or claiming a hands-off approach are no longer serving China's needs. The policy of joint development inherited from Deng has failed to bring about any significant cooperation with neighboring countries in the sea, and the assertion of the nine-dash line claims amid the U.N. sea treaty filings has simultaneously increased domestic Chinese nationalism and countermoves by neighboring countries.

Despite the lack of clarity on its maritime policy, China has demonstrated its intent to further consolidate its claims based on the nine-dash line. Beijing recognizes that policy changes are needed, but any change has its attendant consequences. The path of transition is fraught with danger, from disgruntled domestic elements to aggressive reactions by China's neighbors, but by intent or by default, change is happening, and how the foreign policy debate plays out will have lasting consequences for China's maritime strategy and its international position as a whole.

[Crafty_Dog]

India: Continued Activity in the South China Sea
July 20, 2012 | 1045 GMT
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Summary

Indian state-owned energy company ONGC Videsh Ltd. announced July 19 that it would continue participating in a joint oil and natural gas exploration project with Vietnam in Block 128, one of several potentially exploitable oil blocks in the South China Sea. The company withdrew from the project in May -- purportedly over unfavorable exploration conditions -- but it reconsidered its position after Hanoi reportedly pledged to give ONGC Videsh additional data and other incentives.

Complicating the project was China, which claims sole domain over the South China Sea and has long opposed joint exploration in its waters unless it includes China. Many observers considered ONGC Videsh's initial withdrawal to be a bow to China's demands, despite New Delhi's claims to the contrary. But with the decision to renew the contract, India has shown its willingness to align with Vietnam amid tensions in the South China Sea, even at the risk of hurting its relations with China. Still, a number of questions remain over the commercial viability of the venture and over the implications of Beijing's response.



Analysis

China's objections to the project are twofold. With tensions rising amid territorial disputes in the South China Sea, smaller countries in the region are turning to outside actors to help reinforce their territorial claims. Beijing's opposition is meant to warn Vietnam against joint exploration with non-claimant countries. This complicates Beijing's efforts to contain the disputes among claimant countries. At the same time, China wants to prevent India from increasing its presence in the South China Sea.


.For its part, India wants to operate in the South China Sea as a means to counterbalance China's regional influence and as a way to divert Beijing's attention from New Delhi's immediate strategic interests. By cooperating with Vietnam, India could gain some leverage in the South China Sea disputes. Engaging Beijing close to its own turf in this way could serve to keep China at bay while also enhancing New Delhi's role in the growing regional competition for energy resources.

Vietnam wants to counter China's claim to the South China Sea; increasing its presence through resource-exploration projects is one way it can achieve that goal. However, Vietnam lacks the technological capability needed to explore deeper waters, so it is courting the assistance of other countries. By locking in such collaborations, Vietnam could mitigate the financial and political risks involved with resource exploration in the South China Sea. Therefore, India's withdrawal on the project dealt a major setback to Vietnam's goal of countering Beijing's territorial claims.

A New Auction
To counter Vietnam's offer to India and to facilitate its claim to the South China Sea, Chinese state-owned energy firm China National Offshore Oil Corp. in late June opened nine offshore oil blocks to joint operation with foreign companies. The move marked the first auction in the area by the Chinese firm in two decades. Notably, the oil blocks Beijing opened are close to the western fringe of China's nine-dash line -- a loose boundary line demarcating China's maritime claims -- near the Vietnamese coast, and most blocks appear to overlap with those of Vietnam. The area of Blocks Yiqingxi 18 and Danwan 22 directly overlap with Block 128, where the Vietnam-India joint venture is located.

Underlying China National Offshore Oil Corp.'s auction is Beijing's desire to exercise its right to energy exploration in the disputed waters. As the firm's deep-sea technological capabilities grow, Beijing could become the only country with a territorial claim to the South China Sea that can conduct exploration projects without the help of other countries. As a result, the company will be uniquely positioned to lead future explorations in the disputed waters, and that ability will give credence to China's territorial claims.

China National Offshore Oil Corp.'s auction marks a significant development in Beijing's maritime strategy. Previously, Beijing protested any activity in the South China Sea and performed somewhat low-level naval harassment maneuvers against those active in the waters. Now, it has opened the sea to competition over energy and mineral resources. By initiating joint exploration projects, Beijing is attempting to force Vietnam to reconsider its strategy of working jointly with outside countries like India to the exclusion of China.

Concerns over Viability
However, the prospects for exploiting resources in the sea are unclear. ONGC Videsh has been engaged in exploratory projects with Vietnam since 2006 and has invested more than $50 million in block 128 alone. India earlier relinquished the nearby block 127 after finding insufficient production potential, and the hard seabed terrain in block 128 complicates prospects for recovering oil. If the venture with Vietnam does not produce oil, ONGC Videsh will have to carry at least some of the burden. Importantly, any move by India and Vietnam will inevitably provoke strong opposition from China.

Each country's decision to operate in the South China Sea derives largely from their strategic interests rather than their economic interests. For China, the auction is largely a political move intended to preempt outside countries interested in exploring the blocks, thereby buying time for China's own exploration even while opening up energy competition in the sea. Despite the fact that the auction has yet to attract interest from foreign companies, Beijing has little intention of backing off from its position. Meanwhile, China will continue to pressure other countries with claims in the South China Sea to not explore the disputed waters. And as pressure from China mounts, India, Vietnam and any other country looking to explore without Chinese participation will have to weigh the political implications.


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Read more: India: Continued Activity in the South China Sea | Stratfor

[Crafty_Dog]

America Needs a Business Pivot Toward Asia
Economic engagement should augment military presence. Start with free trade agreements..
By CURTIS S. CHIN

Much has been made of the Obama administration's policy "pivot" to Asia, increasing diplomatic outreach, and rebalancing and repositioning of military assets in the Asia-Pacific region. Missing from this shift is a "business pivot"—a more concerted effort to increase trade and investment between America and its allies in the region. This would be good strategy, and good economics too.

So far, Washington appears to be thinking of Southeast Asia—and particularly the problem of growing Chinese assertiveness in the South China Sea—primarily in military terms. In June, U.S. Secretary of Defense Leon Panetta announced plans to base 60% of U.S. naval forces in the Asia-Pacific region by 2020.

Yet adding a pro-growth, pro-business component to U.S. strategy could help Asian countries become stronger, more confident partners. Commercial ties also can help cement friendships. Beijing understands this, which is one reason Chinese companies have been investing heavily in the region.

This would not mean starting from scratch: A significant U.S.-Asia economic and trade foundation exists that can be built on. In Southeast Asia, for example, U.S. exports exceeded $76 billion in 2011. American companies also have invested twice as much in the region as they have in China.

To cite one example, Ford is investing $450 million in a new Thai plant that will employ 2,200. Ford is the second-largest automotive investor in Thailand after Toyota, having pumped in $2.5 billion over the years. Its success in Asia is to the benefit of the United States.

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Barbara Weisel, Assistant U.S. Trade Representative for Southeast Asia and the Pacific, fourth from right, looks on during a news conference at the Trans-Pacific Partnership Free Trade Agreement talks Tuesday, July 10, 2012, in San Diego.
.But whereas the Chinese are now actively encouraging greater overseas investment to catch up, Washington has lost focus. America needs more than the occasional trade mission.

The first step in a business pivot needs to be an explicit recommitment to free trade broadly and to free trade agreements (FTAs) specifically. For the past three years, too little has been done to advance a free-trade agenda beyond ratifying—after long delays—agreements initiated by prior U.S. administrations.

In the Asia-Pacific region, the U.S. has free trade agreements with only Australia, Singapore and South Korea. Negotiations continue toward a regional Trans-Pacific Partnership (TPP) multilateral trade agreement. Yet the U.S. commitment to this agreement, while welcome, again predates the present administration.

New initiatives are warranted. Washington could set a firm deadline for concluding TPP talks. Recently the focus seems to be more on expanding the number of participants—Canada and Mexico recently joined, and Japan might—than on concluding negotiations. While businesses would benefit from a deal covering as many countries as possible, the number of countries is irrelevant if expanding participation means there's no deal at all.

Washington also should look for opportunities to improve trade on a day-to-day basis. Logistics and transport are obvious cases. A low-profile but important move would be to boost negotiations on open skies agreements in Asia. Such deals allow airlines, including freight carriers, greater freedom to set routes and schedules between signatory countries.

As of late 2010, the U.S. had more than 100 open skies partners. Conspicuously missing from the list, however, are several Asian nations. The Philippines and Vietnam each could provide future opportunities for partnership agreements if governments on both sides understand the benefits of greater cooperation and competition, and of encouraging the building of businesses across borders.

Finally, a business pivot should consist not just of actions but also of words. It means ceasing to demonize companies that trade and invest overseas.

It's difficult to excite business leaders about the prospect of additional trade with Asia if they have to worry about becoming political whipping boys. Partly this would be a matter of politicians exercising some restraint, but partly also a matter of putting some leaders in Washington who understand the strategic and economic importance of trade with and investment in Asia and are willing to help businesses make that case at home and push for expanded opportunities abroad.

Unfortunately, there's hardly anyone in Washington right now making the case that protectionism hurts both the U.S. economy and American interests abroad. And no one is positioned to communicate with the business community on how best to expand commercial ties in Asia.

A central benefit of peace and stability in Southeast Asia—which is a goal of the U.S. administration's strategic pivot—would be to open the way for greater commercial opportunities on both sides of the Pacific. It's time for Washington to understand that trade and economic ties can be part of the means to a strategic solution in the region, and not just the ends.

Mr. Chin, a senior fellow and executive-in-residence at the Asian Institute of Technology, is a managing director with RiverPeak Group. He served as U.S. ambassador to the Asian Development Bank from 2007 to 2010.

[Crafty_Dog]

Looks like Sen. Webb has been reading this thread 

The South China Sea's Gathering Storm
All of East Asia is waiting to see how the U.S. will respond to China's aggression.

   
By JAMES WEBB

Since World War II, despite the costly flare-ups in Korea and Vietnam, the United States has proved to be the essential guarantor of stability in the Asian-Pacific region, even as the power cycle shifted from Japan to the Soviet Union and most recently to China. The benefits of our involvement are one of the great success stories of American and Asian history, providing the so-called second tier countries in the region the opportunity to grow economically and to mature politically.

As the region has grown more prosperous, the sovereignty issues have become more fierce. Over the past two years Japan and China have openly clashed in the Senkaku Islands, east of Taiwan and west of Okinawa, whose administration is internationally recognized to be under Japanese control. Russia and South Korea have reasserted sovereignty claims against Japan in northern waters. China and Vietnam both claim sovereignty over the Paracel Islands. China, Vietnam, the Philippines, Brunei and Malaysia all claim sovereignty over the Spratly Islands, the site of continuing confrontations between China and the Philippines.

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Ryan Inzana

Such disputes involve not only historical pride but also such vital matters as commercial transit, fishing rights, and potentially lucrative mineral leases in the seas that surround the thousands of miles of archipelagos. Nowhere is this growing tension clearer than in the increasingly hostile disputes in the South China Sea.

On June 21, China's State Council approved the establishment of a new national prefecture which it named Sansha, with its headquarters on Woody Island in the Paracel Islands. Called Yongxing by the Chinese, Woody Island has no indigenous population and no natural water supply, but it does sport a military-capable runway, a post office, a bank, a grocery store and a hospital.

The Paracels are more than 200 miles southeast of Hainan, mainland China's southernmost territory, and due east of Vietnam's central coast. Vietnam adamantly claims sovereignty over the island group, the site of a battle in 1974 when China attacked the Paracels in order to oust soldiers of the former South Vietnamese regime.

The potential conflicts stemming from the creation of this new Chinese prefecture extend well beyond the Paracels. Over the last six weeks the Chinese have further proclaimed that the jurisdiction of Sansha includes not just the Paracel Islands but virtually the entire South China Sea, connecting a series of Chinese territorial claims under one administrative rubric. According to China's official news agency Xinhua, the new prefecture "administers over 200 islets" and "2 million square kilometers of water." To buttress this annexation, 45 legislators have been appointed to govern the roughly 1,000 people on these islands, along with a 15-member Standing Committee, plus a mayor and a vice mayor.

These political acts have been matched by military and economic expansion. On July 22, China's Central Military Commission announced that it would deploy a garrison of soldiers to guard the islands in the area. On July 31, it announced a new policy of "regular combat-readiness patrols" in the South China Sea. And China has now begun offering oil exploration rights in locations recognized by the international community as within Vietnam's exclusive economic zone.

For all practical purposes China has unilaterally decided to annex an area that extends eastward from the East Asian mainland as far as the Philippines, and nearly as far south as the Strait of Malacca. China's new "prefecture" is nearly twice as large as the combined land masses of Vietnam, South Korea, Japan and the Philippines. Its "legislators" will directly report to the central government.

American reaction has been muted. The State Department waited until Aug. 3 before expressing official concern over China's "upgrading of its administrative level . . . and establishment of a new military garrison" in the disputed areas. The statement was carefully couched within the context of long-standing policies calling for the resolution of sovereignty issues in accordance with international law and without the use of military force.

Even so, the Chinese government responded angrily, warning that State Department officials had "confounded right and wrong, and sent a seriously wrong message." The People's Daily, a quasi-official publication, accused the U.S. of "fanning the flames and provoking division, deliberately creating antagonism with China." Its overseas edition said it was time for the U.S. to "shut up."

In truth, American vacillations have for years emboldened China. U.S. policy with respect to sovereignty issues in Asian-Pacific waters has been that we take no sides, that such matters must be settled peacefully among the parties involved. Smaller, weaker countries have repeatedly called for greater international involvement.

China, meanwhile, has insisted that all such issues be resolved bilaterally, which means either never or only under its own terms. Due to China's growing power in the region, by taking no position Washington has by default become an enabler of China's ever more aggressive acts.

The U.S., China and all of East Asia have now reached an unavoidable moment of truth. Sovereignty disputes in which parties seek peaceful resolution are one thing; flagrant, belligerent acts are quite another. How this challenge is addressed will have implications not only for the South China Sea, but also for the stability of East Asia and for the future of U.S.-China relations.

History teaches us that when unilateral acts of aggression go unanswered, the bad news never gets better with age. Nowhere is this cycle more apparent than in the alternating power shifts in East Asia. As historian Barbara Tuchman noted in her biography of U.S. Army Gen. Joseph Stillwell, it was China's plea for U.S. and League of Nations support that went unanswered following Japan's 1931 invasion of Manchuria, a neglect that "brewed the acid of appeasement that . . . opened the decade of descent to war" in Asia and beyond.

While America's attention is distracted by the presidential campaign, all of East Asia is watching what the U.S. will do about Chinese actions in the South China Sea. They know a test when they see one. They are waiting to see whether America will live up to its uncomfortable but necessary role as the true guarantor of stability in East Asia, or whether the region will again be dominated by belligerence and intimidation.

The Chinese of 1931 understood this threat and lived through the consequences of an international community's failure to address it. The question is whether the China of 2012 truly wishes to resolve issues through acceptable international standards, and whether the America of 2012 has the will and the capacity to insist that this approach is the only path toward stability.

Mr. Webb, a Democrat, is a U.S. senator from Virginia.

[Crafty_Dog]

U.S. Plans New Asia Missile Defenses .
Article Video Interactive Graphics Comments (59) more in World | Find New $LINKTEXTFIND$ ».
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By ADAM ENTOUS And JULIAN E. BARNES
The U.S. is planning a major expansion of missile defenses in Asia, a move American officials say is designed to contain threats from North Korea, but one that could also be used to counter China's military.

 
Threats from North Korea and China's increased military presence in Asia are driving the U.S. to expand its military defense in the region. The WSJ's Deborah Kan speaks to reporter Jeremy Page. Photo: DefenseImagery.mil
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The planned buildup is part of a defensive array that could cover large swaths of Asia, with a new radar in southern Japan and possibly another in Southeast Asia tied to missile-defense ships and land-based interceptors.

It is part of the Obama administration's new defense strategy to shift resources to an Asian-Pacific region critical to the U.S. economy after a decade of war in Iraq and Afghanistan.

The expansion comes at a time when the U.S. and its allies in the region voice growing alarm about a North Korean missile threat. They are also increasingly worried about China's aggressive stance in disputed waters such the South China Sea, where Asian rivals are vying for control of oil and mineral rights.

View Interactive

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U.S. defense planners are particularly concerned about China's development of antiship ballistic missiles that could threaten the Navy's fleet of aircraft carriers, critical to the U.S. projection of power in Asia.

"The focus of our rhetoric is North Korea," said Steven Hildreth, a missile-defense expert with the Congressional Research Service, an advisory arm of Congress. "The reality is that we're also looking longer term at the elephant in the room, which is China."

China's Ministry of National Defense didn't comment directly on the anti-missile plans, but sounded a cautious note.

"China has always believed that anti-missile issues should be handled with great discretion, from the perspective of protecting global strategic stability and promoting strategic mutual trust among all countries," it said in a statement on Thursday. "We advocate that all parties fully respect and be mindful of the security concerns of one another and try to realize overall safety through mutual benefit and win-win efforts, while avoiding the situation in which one country tries to let its own state security take priority over other countries' national security."

In a separate statement, China's Foreign Ministry said it hopes the U.S. "will carefully handle this problem out of concern for maintaining the global and regional strategic balance and stability, and promoting the strategic mutual trust among all countries."

A centerpiece of the new effort would be the deployment of a powerful early-warning radar, known as an X-Band, on an undisclosed southern Japanese island, said U.S. defense officials. The Pentagon is discussing that prospect with Japan, one of Washington's closest regional allies. The radar could be installed within months of Japan's agreement, American officials said, and would supplement an X-Band the U.S. positioned in Aomori Prefecture in northern Japan in 2006.

A Japanese Ministry of Defense spokesman said the government wouldn't comment. The U.S. and Japan have ruled out deploying the new radar to Okinawa, a southern island whose residents have long chafed at the U.S. military forces' presence there.

Officials with the U.S. military's Pacific Command and Missile Defense Agency have also been evaluating sites in Southeast Asia for a third X-Band radar to create an arc that would allow the U.S. and its regional allies to more accurately track any ballistic missiles launched from North Korea, as well as from parts of China.

Some U.S. defense officials have focused on the Philippines as the potential site for the third X-Band, which is manufactured by Raytheon Co. Pentagon officials said a location has yet to be determined and that discussions are at an early stage.

The beefed-up U.S. presence will likely raise tensions with the Chinese, who have been sharp critics of U.S. ballistic missile defenses in the past. Beijing fears such a system, similar to one the U.S. is deploying in the Middle East and Europe to counter Iran, could diminish China's strategic deterrent. Beijing objected to the U.S.'s first X-Band deployment in Japan in 2006. Moscow has voiced similar concerns about the system in Europe and the Middle East.

Without commenting on specific plans, Pentagon Press Secretary George Little said: "North Korea is the immediate threat that is driving our missile defense decision making."

In April, North Korea launched a multistage rocket that blew up less than two minutes into its flight. It conducted previous launches in August 1998, July 2006 and April 2009.

The Pentagon sent a sea-based X-Band, normally docked in Pearl Harbor, to the Pacific to monitor the most recent North Korean launch as a precaution.

The Pentagon is particularly concerned about the growing imbalance of power across the Taiwan Strait. China has been developing advanced ballistic missiles and antiship ballistic missiles that could target U.S. naval forces in the region.

China has between 1,000 and 1,200 short-range ballistic missiles aimed at Taiwan, and has been developing longer range cruise and ballistic missiles, including one designed to hit a moving ship more than 930 miles away, says the Pentagon's latest annual report on China's military.

The proposed X-Band arc would allow the U.S. to not only cover all of North Korea, but to peer deeper into China, say current and former U.S. officials.

"Physics is physics," a senior U.S. official said. "You're either blocking North Korea and China or you're not blocking either of them."

Beijing has said it poses no threat to its neighbors. Chinese government officials couldn't be reached Wednesday, and its embassy in Washington, D.C., didn't return requests for comment.

One goal of the Pentagon is to reassure its anxious regional allies, which are walking a fine line. Many want the U.S.'s backing but also don't want to provoke China, and they aren't sure Washington can counter Beijing's rapid military modernization because of America's fiscal constraints.

U.S. Defense Secretary Leon Panetta said during a visit Wednesday to the USS John C. Stennis warship in Washington state that the U.S. would "focus and project our force into the Pacific."

The U.S. presence on the ground in Asia, especially the Marine bases in Okinawa, has been a source of constant tension, and a more determined presence could spark similar problems. In addition to the new X-Band site in southern Japan, the U.S. plans to increase the number of Marines in Okinawa in the near term before relocating them to Guam. As the Marines are pulled out of Afghanistan, going from 21,000 to less than 7,000, the number of forces on Okinawa will rise, from about 15,000 to 19,000, officials said.

Analysts say it is unclear how effective U.S. missile defenses would be against China. A 2010 Pentagon report on ballistic missile defenses said the system can't cope with large-scale Russian or Chinese missile attacks and isn't intended to affect the strategic balance with those countries.

The senior U.S. official said the new missile defense deployments would be able to track and repulse at least a limited strike from China, potentially enough to deter Beijing from attempting an attack.

Jeffrey Lewis, director of the East Asia nonproliferation program at the Monterey Institute of International Studies in California, said any missile-defense deployments in the Asian theater will alarm the Chinese, particular if they believe the systems are designed to cover Taiwan. "If you're putting one in southern Japan and one in the Philippines, you're sort of bracketing Taiwan," Mr. Lewis said. "So it does look like you're making sure that you can put a missile defense cap over the Taiwanese."

Mr. Hildreth of the Congressional Research Service said the U.S. was "laying the foundations" for a regionwide missile defense system that would combine U.S. ballistic missile defenses with those of regional powers, particularly Japan, South Korea and Australia.

U.S. officials say some of these allies have, until now, resisted sharing real-time intelligence, complicating U.S. efforts. Territorial disputes between South Korea and Japan have flared anew in recent weeks, underlining the challenge of creating unified command and control systems that would be used to shoot down incoming missiles.

The U.S. has faced a similar problem building an integrated missile-defense system in the Persian Gulf.

Once an X-Band identifies a missile's trajectory, the U.S. can deploy ship-or-land-based missile interceptors or antimissile systems.

The Navy has drawn up plans to expand its fleet of ballistic missile-defense-capable warships from 26 ships today to 36 by 2018, according to Navy officials and the Congressional Research Service. Officials said as many as 60% of those are likely to be deployed to Asia and the Pacific.

In addition, the U.S. Army is considering acquiring additional Terminal High Altitude Area Defense, or THAAD, antimissile systems, said a senior defense official. Under current plans, the Army is building six THAADs.

[Crafty_Dog]

As China Muscles Into the Pacific, the U.S. Lacks a Strategy
Beijing's navy and weapons systems are intended to push the U.S. back from the Western Pacific..
By JOHN BOLTON

China's assertive territorial claims in the East and South China Seas have flared intermittently over the years into diplomatic and even physical confrontations. Until recently, however, these incidents—seizures of islands, reefs or rock outcroppings, or naval vessels ramming one another—have subsided after a flurry of tactical responses.

That pattern is changing permanently. Whoever becomes president in January will require a policy of sustained American involvement and leadership, not merely the watchful attitude we have long maintained. The U.S. is already perilously close to the point strategically where China will simply run the table with its claims. Potential hostilities are no longer hypothetical.

Last week in Beijing, Secretary of State Hillary Clinton repeated the usual U.S. bromides, namely: resolving the region's maritime disputes peacefully through negotiation consistent with international-law principles regarding freedom of navigation.

Foreign Minister Yang Jiechi replied bluntly that China was sovereign over the territories, and government media mouthpiece Xinhua warned the U.S. that "strategic miscalculations about a rising power could well lead to confrontations and even bloody conflicts, like the war between ancient Athens and Sparta. To avoid such a catastrophic scenario, Washington has to change its obsolete and doubt-ridden thinking pattern and cooperate with Beijing to settle their differences."

China sees these waters through a prism of increasing confidence based on geographical proximity; the weakness of, and competition among, the other territorial claimants; decreasing U.S. Navy capabilities due to draconian budget reductions; President Obama's diffidence in protecting U.S. interests abroad; and, for most Americans, the uninspiring abstractness of "freedom of the seas."

In Washington today, these disputes appear distant, almost trivial, akin to Neville Chamberlain's 1938 description of Czechoslovakia as "a faraway country of which we know little." Such lassitude must give way to a strategic approach based on three key elements.

First, the U.S. must decide unequivocally that Beijing's expansionism in the East and South China Seas is contrary to American national interests. There are high, tangible stakes for us and our Asian and Pacific friends, ranging broadly from Japan and South Korea to Australia and the Association of Southeast Asian Nations (Asean) including Indonesia, Malaysia, Vietnam and the Philippines. The stakes include undersea mineral resources and sea lanes of communication and trade critical to U.S. and global prosperity.

Sweet-sounding platitudes about international law will not prevent Beijing's looming hegemony in these waters. While not every Chinese claim is illegitimate, we must prevent the country's sheer mass and presence from prevailing. The U.N.-sponsored Law of the Sea Treaty—which may be passed by the lame-duck Congress this fall after going unratified for three decades—will be inconsequential, as the regional parties, particularly China, fully understand. This is about power and resolve.

Second, we must rapidly rebuild America's Navy, without which any shift in strategic thinking is hollow. This is a maritime problem at the operational level, demanding adequate resources. Today we have about 285 warships at sea, a scarcity of vessels not seen since World War I.

China is building its own blue-water navy for the first time in centuries, actively pursuing anti-access, area-denial tactics and weapons systems intended to push the U.S. back from the Western Pacific. Unless we increase the Navy's capabilities, or essentially abandon other ocean spaces, the negative direction and ultimate outcome in the waters off China are clear.

America's current approach—watching while initially minor incidents risk escalating—puts us at a distinct disadvantage. Passivity will allow Beijing to prevail repeatedly, incident after incident, until U.S. weakness becomes so palpable that there is no doubt of China's across-the-board success.

Third, we must work diplomatically, largely behind the scenes, to resolve differences among the other claimants. In the East China Sea, Japan is the major competitor, while Beijing butts heads with Vietnam, the Philippines and other Asean members in the South China Sea. These regions are distinct geographically and politically, but for China both are part of the same strategic picture. So it must be for America.

China's goal is to split the seams, pitting Vietnam against the Philippines; isolating Japan; neutralizing Taiwan, and otherwise sowing discord among its competitors. The more intra-Asean disputes we can eliminate, the greater the potential for a common position. This pragmatic diplomatic strategy of resolving non-Chinese competing claims hardly guarantees positive results, but it beats repeating academic mantras about international law. (Taiwan could also help politically by renouncing China's outlandish claims to disputed territories.)

The Obama administration argues that its "pivot" from the Middle East to Asia, combined with Secretary Clinton's frequent-flier miles, will resolve these problems. Not so. America is a global power, with continuing interests everywhere. We don't pivot like a weather vane from one region to another, especially since it is folly to believe the Middle East is so tranquil that we can pay it less attention.

America's China policy should be comprehensive, agile and persistent, but one fixed element must be that the international waters around China will not become Lake Beijing.


Mr. Bolton, a senior fellow at the American Enterprise Institute, is the author of "Surrender Is Not an Option: Defending America at the United Nations" (Simon & Schuster, 2007).

[Crafty_Dog]

China Irks Japan With Patrol-Ship Incursion .
By YUKA HAYASHI And BRIAN SPEGELE
Tensions between Japan and China escalated Friday when an unusually large group of Chinese patrol ships entered Japanese territorial waters for a few hours near disputed islands in the East China Sea, as Beijing tried to assert its sovereignty.

The provocative action came days after Tokyo announced plans to purchase three of the contested islands it controls from a Japanese private owner to keep them out of the hands of nationalist Tokyo governor Shintaro Ishihara, who had intended to use the territory to further inflame the situation.

While Tokyo's move was intended to calm Beijing, it instead drew an angry response from Chinese Premier Wen Jiabao, prompting Beijing to say it planned to send marine surveillance vessels toward the islands.

China's foreign ministry said the ships entered the waters Friday to conduct maritime surveillance and that Beijing was carrying out a mission of "law enforcement over its maritime rights." Japan's coast guard said the ships had all left the area after seven hours, without incident.

Japan Real Time

Shanghai Consulate Details Accounts of Japanese Harassed in China

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Chinese patrol ships have repeatedly entered Japanese waters near the islands—known as Senkaku in Japan and Diaoyu in China—over the past year. But the group of six vessels that entered Friday morning was the largest such mission ever, said a Japanese government spokesman. The chain has become a symbol of maritime rivalry between the two Asian powers.

The last time tensions flared over the islands in 2010, a smaller group of Chinese patrol ships neared, but never entered, Japanese territorial waters.

Japanese Prime Minister Yoshihiko Noda told reporters Friday his government would "take all possible measures" to ensure the security around the islands, said Kyodo News. Tokyo said it set up a special office at the prime minister office's crisis management center to deal with the situation and filed a formal protest to China's ambassador to Japan.

Disputed Seas
Competing territorial claims have led to maritime disputes off the coast of Asia.

View Interactive

..Tensions High Over Asian Islands
Competing territorial claims have led to maritime disputes in the seas around Asia.

View Slideshow


Kyodo/Reuters
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The Japanese coast guard said one of the boats entered Japanese waters around 6:18 am Tokyo time at about 22 kilometers, or 14 miles, north-northeast of Taisho island, one of the craggy islets that make up the chain. It was followed by a second boat two minutes later. Territorial waters are defined as the area within 12 nautical miles of a nation's mainland.

Four other vessels later followed into the waters, before the group sailed out to the area known as the contiguous zone.

The Japanese coast guard said it had warned the boats not to enter the waters after the first boat reached a distance of 44 kilometers, or 27 miles, from the islands earlier in the morning.

All ships left the territorial waters by 1:21 pm Tokyo time. One of the ships even sent a radio message in Japanese to a Japanese coast guard vessel. "Uotsuri Island is Chinese territory. Our ship is conducting official duties," the Chinese boat said, according to the coast guard. "Please leave these waters immediately." Uotsuri is the largest of the islands.

The growing friction between patrol ships is unlikely to lead to an immediate military confrontation between the two nations that share significant trade and economic ties. Both the naval forces of People's Liberation Army and Japan's Maritime Self Defense Force have kept their vessels far away from the disputed islands.

Still, Japan and many other Asian nations are growing increasingly wary of China's growing territorial assertiveness around the region. Friday's show of force came on the eve of a planned Asian trip by U.S. Defense Secretary Leon Panetta, who will visit both countries next week, part of the Pentagon's recalibration to rebalance its focus on Asia security.

The U.S. and China are grappling with a number of military issues, including the possibility of bolstered U.S. missile defenses in the Asian Pacific region, the development of advanced Chinese antiship missiles and concerns over freedom of navigation in the South China Sea, where China and U.S. partners including the Philippines have competing territorial claims.

The latest flare-up in territorial tensions came after Mr. Noda's government announced Monday plans to buy three of the Senkaku islands from a private Japanese owner. Japanese officials explained the action was meant to prevent further deterioration in sentiment on both the Chinese and Japanese sides by ending Mr. Ishihara's high-profile campaign to raise funds to buy the islands. Tokyo's combative governor had talked about cementing Japanese claims to the islands through high-visibility projects such as building ports. Mr. Noda's government has promised lower-key management of the territory.

That explanation, however, didn't go over well in China. "What the Japanese government did constitutes a gross violation of China's territorial sovereignty," Le Yucheng, China's assistant foreign minister told a conference on the disputed islands in Beijing on Friday. He said that "extreme right-wing forces" in Japan are steering "China-Japan relations down an extremely dangerous road."

A number of private and official cultural exchange programs have been canceled, government officials have hinted at curbing purchase of Japanese goods, and anti-Japan rallies have spread to several cities in China.

"If some Chinese consumers want to express their views in a reasonable way, we think that's their right and we fully understand," China's vice minister of commerce, Jiang Zengwei, said at a Thursday press conference, referring to the island dispute.

Outside the Japanese embassy in Beijing this week, mostly small groups of Chinese protesters—police have so far prevented large crowds from gathering—have demonstrated against Tokyo. Anti-Japanese sentiment has been among the most discussed topics on popular online Chinese forums this week, with many users calling for more protests over the weekend.

"The Chinese people love peace, but they are never afraid of confrontation or threats," the state-run Xinhua news agency said Friday.

The Japanese consulate in Shanghai issued a special warning Thursday to the city's 50,000-plus Japanese residents, citing several instances of minor violence. In one, a group of several Japanese were attacked on a street by someone shouting "Japanese." One person was injured after a bowl of noodles was dumped on him and another person had eyeglasses smashed, according to a statement posted on the consulate's website.

The Japanese government has called on Japanese residents and businesses based in China to use extra caution in coming days, citing the possibility of violent anti-Japan protest rallies across China over the weekend around a key anniversary of Japan's occupation of China during the early part of last century.

Chinese foreign ministry spokesman Hong Lei Friday characterized the dispatch of ships to the islands as "a normal performance of duty" in a Chinese sovereign area. Asked about the Shanghai incidents, he told a regular news briefing that China is "strongly dissatisfied" with Japan's "infringement of Chinese territory," but "the Japanese people are innocent" and "Japanese people living in China should be protected according to the law."

Analysts say the steady stream of anti-Japan rhetoric in recent days from Chinese officials and state media has been aimed in part at appeasing a public that's full of anti-Japanese sentiment—while avoiding escalating tensions further, particularly ahead of the Communist Party's sensitive once-a-decade leadership transition beginning later this month.

"The truth is the Chinese have no interest in escalating this," said Brad Glosserman, an Asia-Pacific analyst for the Center for Strategic and International Studies. "The problem is a very powerful nationalist impulse."

— William Kazer contributed to this article.
Write to Yuka Hayashi at yuka.hayashi@wsj.com and Brian Spegeleat brian.spegele@wsj.com

[Crafty_Dog]

http://freebeacon.com/chinese-general-prepare-for-combat/

[Crafty_Dog]

http://blog.foreignpolicy.com/posts/2012/07/13/china_caught_red_handed_in_the_south_china_seas?wpisrc=obnetwork

[Crafty_Dog]

Understanding the China-Japan Island Conflict
September 25, 2012 | 0902 GMT
 
By Rodger Baker
Vice President of East Asia Analysis
 
Sept. 29 will mark 40 years of normalized diplomatic relations between China and Japan, two countries that spent much of the 20th century in mutual enmity if not at outright war. The anniversary comes at a low point in Sino-Japanese relations amid a dispute over an island chain in the East China Sea known as the Senkaku Islands in Japan and Diaoyu Islands in China.
 
These islands, which are little more than uninhabited rocks, are not particularly valuable on their own. However, nationalist factions in both countries have used them to enflame old animosities; in China, the government has even helped organize the protests over Japan's plan to purchase and nationalize the islands from their private owner. But China's increased assertiveness is not limited only to this issue. Beijing has undertaken a high-profile expansion and improvement of its navy as a way to help safeguard its maritime interests, which Japan -- an island nation necessarily dependent on access to sea-lanes -- naturally views as a threat. Driven by its economic and political needs, China's expanded military activity may awaken Japan from the pacifist slumber that has characterized it since the end of World War II.
 
An Old Conflict's New Prominence
 
The current tensions surrounding the disputed islands began in April. During a visit to the United States, Tokyo Gov. Shintaro Ishihara, a hard-line nationalist known for his 1989 book The Japan That Can Say No, which advocated for a stronger international role for Japan not tied to U.S. interests or influence, said that the Tokyo municipal government was planning to buy three of the five Senkaku/Diaoyu islands from their private Japanese owner. Ishihara's comments did little to stir up tensions at the time, but subsequent efforts to raise funds and press forward with the plan drew the attention and ultimately the involvement of the Japanese central government. The efforts also gave China a way to distract from its military and political standoff with the Philippines over control of parts of the Spratly Islands in the South China Sea.
 
For decades, Tokyo and Beijing generally abided by a tacit agreement to keep the islands dispute quiet. Japan agreed not to carry out any new construction or let anyone land on the islands; China agreed to delay assertion of any claim to the islands and not let the dispute interfere with trade and political relations. Although flare-ups occurred, usually triggered by some altercation between the Japanese coast guard and Chinese fishing vessels or by nationalist Japanese or Chinese activists trying to land on the islands, the lingering territorial dispute played only a minor role in bilateral relations.
 
However, Ishihara's plans for the Tokyo municipal government to take over the islands and eventually build security outposts there forced the Japanese government's hand. Facing domestic political pressure to secure Japan's claim to the islands, the government determined that the "nationalization" of the islands was the least contentious option. By keeping control over construction and landings, the central government would be able to keep up its side of the tacit agreement with China on managing the islands.
 
China saw Japan's proposed nationalization as an opportunity to exploit. Even as Japan was debating what action to take, China began stirring up anti-Japanese sentiment and Beijing tacitly backed the move by a group of Hong Kong activists in August to sail to and land on the disputed islands. At the same time, Beijing prevented a Chinese-based fishing vessel from attempting the same thing, using Hong Kong's semi-autonomous status as a way to distance itself from the action and retain greater flexibility in dealing with Japan.
 
As expected, the Japanese coast guard arrested the Hong Kong activists and impounded their ship, but Tokyo also swiftly released them to avoid escalating tensions. Less than a month later, after Japan's final decision to purchase the islands from their private Japanese owner, anti-Japanese protests swept China, in many places devolving into riots and vandalism targeting Japanese products and companies. Although many of these protests were stage-managed by the government, the Chinese began to clamp down when some demonstrations got out of control. While still exploiting the anti-Japanese rhetoric, Chinese state-run media outlets have highlighted local governments' efforts to identify and punish protesters who turned violent and warn that nationalist pride is no excuse for destructive behavior.
 
Presently, both China and Japan are working to keep the dispute within manageable parameters after a month of heightened tensions. China has shifted to disrupting trade with Japan on a local level, with some Japanese products reportedly taking much longer to clear customs, while Japan has dispatched a deputy foreign minister for discussions with Beijing. Chinese maritime surveillance ships continue to make incursions into the area around the disputed islands, and there are reports of hundreds or even thousands of Chinese fishing vessels in the East China Sea gathered near the waters around the islands, but both Japan and China appear to be controlling their actions. Neither side can publicly give in on its territorial stance, and both are looking for ways to gain politically without allowing the situation to degrade further.
 
Political Dilemmas in Beijing and Tokyo
 
The islands dispute is occurring as China and Japan, the world's second- and third-largest economies, are both experiencing political crises at home and facing uncertain economic paths forward. But the dispute also reflects the very different positions of the two countries in their developmental history and in East Asia's balance of power.
 
China, the emerging power in Asia, has seen decades of rapid economic growth but is now confronted with a systemic crisis, one already experienced by Japan in the early 1990s and by South Korea and the other Asian tigers later in the decade. China is reaching the limits of the debt-financed, export-driven economic model and must now deal with the economic and social consequences of this change. That this comes amid a once-in-a-decade leadership transition only exacerbates China's political unease as it debates options for transitioning to a more sustainable economic model. But while China's economic expansion may have plateaued, its military development is still growing.
 
The Chinese military is becoming a more modern fighting force, more active in influencing Chinese foreign policy and more assertive of its role regionally. The People's Liberation Army Navy on Sept. 23 accepted the delivery of China's first aircraft carrier, and the ship serves as a symbol of the country's military expansion. While Beijing views the carrier as a tool to assert Chinese interests regionally (and perhaps around the globe over the longer term) in the same manner that the United States uses its carrier fleet, for now China has only one, and the country is new to carrier fleet and aviation operations. Having a single carrier offers perhaps more limitations than opportunities for its use, all while raising the concerns and inviting reaction from neighboring states.
 
Japan, by contrast, has seen two decades of economic malaise characterized by a general stagnation in growth, though not necessarily a devolution of overall economic power. Still, it took those two decades for the Chinese economy, growing at double-digit rates, to even catch the Japanese economy. Despite the malaise, there is plenty of latent strength in the Japanese economy. Japan's main problem is its lack of economic dynamism, a concern that is beginning to be reflected in Japanese politics, where new forces are rising to challenge the political status quo. The long-dominant Liberal Democratic Party lost power to the opposition Democratic Party of Japan in 2009, and both mainstream parties are facing new challenges from independents, non-traditional candidates and the emerging regionalist parties, which espouse nationalism and call for a more aggressive foreign policy.
 
Even before the rise of the regionalist parties, Japan had begun moving slowly but inexorably from its post-World War II military constraints. With China's growing military strength, North Korea's nuclear weapons program and even South Korean military expansion, Japan has cautiously watched as the potential threats to its maritime interests have emerged, and it has begun to take action. The United States, in part because it wants to share the burden of maintaining security with its allies, has encouraged Tokyo's efforts to take a more active role in regional and international security, commensurate with Japan's overall economic influence.
 
Concurrent with Japan's economic stagnation, the past two decades have seen the country quietly reform its Self-Defense Forces, expanding the allowable missions as it re-interprets the country's constitutionally mandated restrictions on offensive activity. For example, Japan has raised the status of the defense agency to the defense ministry, expanded joint training operations within its armed forces and with their civilian counterparts, shifted its views on the joint development and sale of weapons systems, integrated more heavily with U.S. anti-missile systems and begun deploying its own helicopter carriers.
 
Contest for East Asian Supremacy
 
China is struggling with the new role of the military in its foreign relations, while Japan is seeing a slow re-emergence of the military as a tool of its foreign relations. China's two-decade-plus surge in economic growth is reaching its logical limit, yet given the sheer size of China's population and its lack of progress switching to a more consumption-based economy, Beijing still has a long way to go before it achieves any sort of equitable distribution of resources and benefits. This leaves China's leaders facing rising social tensions with fewer new resources at their disposal. Japan, after two decades of society effectively agreeing to preserve social stability at the cost of economic restructuring and upheaval, is now reaching the limits of its patience with a bureaucratic system that is best known for its inertia.
 
Both countries are seeing a rise in the acceptability of nationalism, both are envisioning an increasingly active role for their militaries, and both occupy the same strategic space. With Washington increasing its focus on the Asia-Pacific region, Beijing is worried that a resurgent Japan could assist the United States on constraining China in an echo of the Cold War containment strategy.
 
We are now seeing the early stage of another shift in Asian power. It is perhaps no coincidence that the 1972 re-establishment of diplomatic relations between China and Japan followed U.S. President Richard Nixon's historic visit to China. The Senkaku/Diaoyu islands were not even an issue at the time, since they were still under U.S. administration. Japan's defense was largely subsumed by the United States, and Japan had long ago traded away its military rights for easy access to U.S. markets and U.S. protection. The shift in U.S.-China relations opened the way for the rapid development of China-Japan relations.
 
The United States' underlying interest is maintaining a perpetual balance between Asia's two key powers so neither is able to challenging Washington's own primacy in the Pacific. During World War II, this led the United States to lend support to China in its struggle against imperial Japan. The United States' current role backing a Japanese military resurgence against China's growing power falls along the same line. As China lurches into a new economic cycle, one that will very likely force deep shifts in the country's internal political economy, it is not hard to imagine China and Japan's underlying geopolitical balance shifting again. And when that happens, so too could the role of the United States.
.

Read more: Understanding the China-Japan Island Conflict | Stratfor

[G M]

http://www.cbsnews.com/8301-505123_162-57515278/china-haunted-by-ghost-inventory-shadow-banks/

China haunted by ghost inventory, shadow banks

ByConstantine von Hoffman .

 (Credit: AP) (MoneyWatch) As China's economy slows, the country is also dealing with another impediment to growth -- investors and lenders that obtain loans through the country's unofficial banking system are getting scammed.


This "shadow banking" system in China involves state-sanctioned financial institutions, along with individuals, that loan out or manage money. Shadow banking is prevalent in China because more than 90 percent of the nation's 42 million small businesses are unable to get bank loans, while such investments offer returns at least several times higher than deposits, according to Bloomberg.

According to the People's Bank of China, what it calls the "social financing" system accounted for at least $1.18 trillion in loans last year, or about four times the amount seen in 2002. But some experts say the market for such loans could be even larger, with the French bank Societe Generale pegging it at $2.4 trillion, or about one-third of China's official loan market.

Even China's own data say its economy is troubled
China's economy continues to slow
China warns of persistent economic problems
China won't commit to eurozone aid

As Minxin Pei, a professor of government at Claremont McKenna College, recently explained:


Typically, the shadow banking system pushes something called "wealth management products," which are short-term financial products yielding a much higher rate than bank deposits for investors. To evade regulatory oversight, these products do not appear on a bank's balance sheet. According to Charlene Chu, a highly respected banking analyst for Fitch ratings, China had about $1.6 trillion in wealth management products, about 11.5 percent of the total bank deposits, at the end of June this year.


Many of those "wealth management products" were investments in China's real estate bubble. The collapse of that bubble has meant that money has vanished, destroying huge amounts of personal wealth. Chinese private-loan borrowers filed more than 600,000 lawsuits valued at $17 billion last year, a 38 percent increase over 2010. In the first six months of 2012, the number of suits rose 25 percent, according to People's Court, a newspaper run by China's Supreme Court.

It isn't only individuals who have been scammed. Several banks trying to seize stocks of steel used as collateral for defaulted loans are finding that the steel never existed. Chinese authorities are investigating a number of cases in which steel documented in transaction receipts turned out not to be real, belonged to another company or had been pledged as collateral to multiple lenders.

Meanwhile, steel prices are slumping because of China's faltering economy, making it hard for companies to keep up with payments on the $400 billion of debt they racked up during years of double-digit growth, Reuters reports.


Such ghost inventories are exacerbating the wider ailments of the Chinese steel industry. The business is now swamped with over 200 million metric tons of excess production capacity created during last decade's development boom.


One Shanghai trader told the wire service, "What we have seen so far is just the tip of the iceberg. The situation will get worse as poor demand, slumping prices and tight credit from banks create a domino effect on the industry."

[Crafty_Dog]

I have been commenting here for some years now that China's books are cooked.   That said, the subject of Chinese banks is probably best handled on the "China" thread.

[G M]

I have been commenting here for some years now that China's books are cooked.   That said, the subject of Chinese banks is probably best handled on the "China" thread.

Well, if you're wondering why Japan and Taiwan are looking down the barrels of the PLA, it's one part of China's economy crumbling and one heaping dose of Obama's groveling before America's enemies.

[Crafty_Dog]

Seeds of Chinese Liberalization, Made in America
Studying in the U.S., then going home by the hundreds of thousands bearing Western ideas..
Article more in Opinion | Find New $LINKTEXTFIND$ ».
smaller Larger facebooktwittergoogle pluslinked ininShare.0EmailPrintSave ↓ More .
.
smaller Larger 
By FRED ZILIAN
Right here in our cozy, conservative boarding school in New England, we are unconsciously and with no malicious intent sowing the seeds of revolution in China. Chinese students coming to the United States for secondary and undergraduate education are learning—through their formal education in American classrooms and through osmosis at corner coffee shops—liberal political ideas and critical-thinking skills that may in the long run help to destabilize the Chinese political system. These students, who will soon be part of the next generation of adults in China, could prove in the long run a more insidious force to the Chinese Communist Party and the People's Liberation Army than the U.S. Seventh Fleet.

The Chinese discovered our New England boarding school only recently. Five years ago we had three Chinese students; four years ago we had 11; then 19; then 26. This year we have 32. Our experience reflects a national phenomenon. According to the U.S. Department of Homeland Security, only 65 Chinese students attended U.S. private high schools in academic year 2005-06. In 2010-11 the number had grown to 6,725. Chinese attendance at U.S. colleges is also booming. In 2011, 157,588 Chinese students attended college here, a 23% increase from the prior year.

Enlarge Image


Close
AFP/Getty Images
 
A student participates in a protest against Chinese patriotism classes in Hong Kong earlier this month.
.The Chinese students at our school are not only among our best students, they are also among our best citizens. They run and are elected to class office, they apply for the Model United Nations Club and—thank heavens—they play musical instruments and sing. Our choir and orchestra would be seriously weakened without their presence.

Sometimes they stun us with their knowledge of American culture. One of our Chinese students was the only child in a class who could identify the "Huckleberry Finn" character known as "the duke"; another was the only one who could quote the final line in the movie "Gone with the Wind."

Since the fall of the Soviet Union in 1991, one of the pre-eminent existential questions facing China has been: Can the Chinese accomplish what the Soviets could not—liberalize economically while maintaining an illiberal political system? The Chinese Communist Party reigns over 1.4 billion people with power concentrated in its 25-member Politburo. There are no genuinely free elections, no legal parties beside the Communist Party, and few guarantees of political rights. Whereas soldiers in Western armies swear to defend such things as the nation and the country's constitution, Chinese soldiers swear first their loyalty to the Communist Party.

My Chinese professor friend has told me that the Chinese people are used to following an emperor or strong man. Until 1911 the leader was an emperor or empress, from 1949-76 it was Mao Zedong. But that was the old China. Because of the tremendous double-digit growth China has realized during the past two decades, the country's middle class has grown to more than 300 million today from under 100 million.

It is a good bet that these people will eventually shift their focus from rudimentary physical and security needs to self-expression values such as freedom of speech and assembly, representative government, and free and fair elections—the values of the Enlightenment that destabilized so many Western countries where power had been concentrated in a monarchy or aristocracy. History is replete with the inexorable spread of a powerful idea or art form.

I asked some of our Chinese students after graduation what they believe they had obtained at our boarding school that their friends in China had not. More practical knowledge, said one.

"Here we have a lot of chances to apply the knowledge we have learned to see if we really understand them, such as essays and labs. These are very good ways to develop independent thinking as well."

Another emphasized the confidence in herself that she developed. If she had not come to our school, she "wouldn't have become this strong person." These students have tasted freedom of thought and have been educated to think independently and critically. As adults they will not easily be made to kowtow to anyone or to any political system that suppresses their freedoms.

Not Mycenaean warriors hiding in a wooden horse but Han students speaking native Mandarin—and excellent English—will return to China after their sojourns in America, carrying not weapons but liberal political ideas and critical-thinking skills. These students, combined with the masses of the new middle class, may prove to be a revolutionary cocktail for Chinese society. Call it the Han Spring.

Mr. Zilian has been a history teacher and the international student adviser at a New England boarding school for 20 years.
 

[G M]

I certainly hope it works out this way.

Seeds of Chinese Liberalization, Made in America
Studying in the U.S., then going home by the hundreds of thousands bearing Western ideas..
Article more in Opinion | Find New $LINKTEXTFIND$ ».
smaller Larger facebooktwittergoogle pluslinked ininShare.0EmailPrintSave ↓ More .
.
smaller Larger 
By FRED ZILIAN
Right here in our cozy, conservative boarding school in New England, we are unconsciously and with no malicious intent sowing the seeds of revolution in China. Chinese students coming to the United States for secondary and undergraduate education are learning—through their formal education in American classrooms and through osmosis at corner coffee shops—liberal political ideas and critical-thinking skills that may in the long run help to destabilize the Chinese political system. These students, who will soon be part of the next generation of adults in China, could prove in the long run a more insidious force to the Chinese Communist Party and the People's Liberation Army than the U.S. Seventh Fleet.

The Chinese discovered our New England boarding school only recently. Five years ago we had three Chinese students; four years ago we had 11; then 19; then 26. This year we have 32. Our experience reflects a national phenomenon. According to the U.S. Department of Homeland Security, only 65 Chinese students attended U.S. private high schools in academic year 2005-06. In 2010-11 the number had grown to 6,725. Chinese attendance at U.S. colleges is also booming. In 2011, 157,588 Chinese students attended college here, a 23% increase from the prior year.

Enlarge Image


Close
AFP/Getty Images
 
A student participates in a protest against Chinese patriotism classes in Hong Kong earlier this month.
.The Chinese students at our school are not only among our best students, they are also among our best citizens. They run and are elected to class office, they apply for the Model United Nations Club and—thank heavens—they play musical instruments and sing. Our choir and orchestra would be seriously weakened without their presence.

Sometimes they stun us with their knowledge of American culture. One of our Chinese students was the only child in a class who could identify the "Huckleberry Finn" character known as "the duke"; another was the only one who could quote the final line in the movie "Gone with the Wind."

Since the fall of the Soviet Union in 1991, one of the pre-eminent existential questions facing China has been: Can the Chinese accomplish what the Soviets could not—liberalize economically while maintaining an illiberal political system? The Chinese Communist Party reigns over 1.4 billion people with power concentrated in its 25-member Politburo. There are no genuinely free elections, no legal parties beside the Communist Party, and few guarantees of political rights. Whereas soldiers in Western armies swear to defend such things as the nation and the country's constitution, Chinese soldiers swear first their loyalty to the Communist Party.

My Chinese professor friend has told me that the Chinese people are used to following an emperor or strong man. Until 1911 the leader was an emperor or empress, from 1949-76 it was Mao Zedong. But that was the old China. Because of the tremendous double-digit growth China has realized during the past two decades, the country's middle class has grown to more than 300 million today from under 100 million.

It is a good bet that these people will eventually shift their focus from rudimentary physical and security needs to self-expression values such as freedom of speech and assembly, representative government, and free and fair elections—the values of the Enlightenment that destabilized so many Western countries where power had been concentrated in a monarchy or aristocracy. History is replete with the inexorable spread of a powerful idea or art form.

I asked some of our Chinese students after graduation what they believe they had obtained at our boarding school that their friends in China had not. More practical knowledge, said one.

"Here we have a lot of chances to apply the knowledge we have learned to see if we really understand them, such as essays and labs. These are very good ways to develop independent thinking as well."

Another emphasized the confidence in herself that she developed. If she had not come to our school, she "wouldn't have become this strong person." These students have tasted freedom of thought and have been educated to think independently and critically. As adults they will not easily be made to kowtow to anyone or to any political system that suppresses their freedoms.

Not Mycenaean warriors hiding in a wooden horse but Han students speaking native Mandarin—and excellent English—will return to China after their sojourns in America, carrying not weapons but liberal political ideas and critical-thinking skills. These students, combined with the masses of the new middle class, may prove to be a revolutionary cocktail for Chinese society. Call it the Han Spring.

Mr. Zilian has been a history teacher and the international student adviser at a New England boarding school for 20 years.
 

[Crafty_Dog]

Freedom works in unexpected ways, often when no one is looking.

[Crafty_Dog]

PHNOM PENH—Asian leaders will make a renewed attempt to hammer out a solution to the bitter South China Sea dispute when they meet in Cambodia this week, using the re-signing of a broad document on conflict resolution to prod China toward agreeing to a code of conduct for the territorial flash point.

Leaders from the 10-member Association of Southeast Asian Nations will sign a commemorative version of a document called the "Declaration of Conduct," which was first agreed in 2002 and sets out broad principles on conflict resolution.

That framework is a precursor to a potential narrower code of conduct for the South China Sea, which countries like the Philippines want implemented but China has in the past been hesitant to support. China's leadership will meet Asean counterparts on Monday. Premier Wen Jiabao is in Cambodia, along with Commerce Minister Chen Deming.

"Hopefully out of this conference there will be a renewed fresh momentum," Indonesia Foreign Minister Marty Natalegawa said in an interview. "We are in a holding station. Not regressing but nor are we at the same time making huge strides. Given the domestic political situation in China and other factors, being where we are is not necessarily negative."

The South China Sea area, which is crossed by more than half the world's total trade and is thought to contain vast energy and mineral reserves, is broadly claimed by China and in part by such nations as Malaysia, the Philippines and Vietnam. The dispute comes amid unease among some Asian countries at China's efforts to increase its influence in the region—at a time the U.S. is seeking to do the same.

Beijing has previously opposed efforts to settle disagreements at multilateral forums, saying it prefers to handle them on a bilateral basis. A meeting of Asean foreign ministers in July broke up without issuing a communiqué for the first time in the bloc's history—an outcome analysts blamed on host Cambodia's weakness in the face of pressure from China.

Qin Gang, director general of the information department of China's ministry of foreign affairs, signaled Beijing's openness to move toward a framework for handling disputes in the South China Sea, but demurred on whether that would be via a code of conduct.

"We hope all parties can firstly observe the DOC round and then we can explore ways to further implement the DOC, by COC or other means. But it needs a serious, good discussion," he said at a briefing.

One official involved in the talks said the commemorative declaration was viewed as a "confidence building measure" designed to ease China's suspicions. "The priority is to ensure there is a good atmosphere" to start talking about a code," the official said.

One idea from Indonesia: Mr. Natalegawa, who has already suggested that a telephone hotline be established in the event of any incident on the South China Sea, says countries could flag intended activities in the waters, without needing to seek permission for such activities. "Countries can inform one another 'this is what we are doing next week or the week after,' " he said. Indonesia has been strengthening its leadership role in Asean and wants to use the bloc to showcase its success in creating a booming economy and stable democracy.

Its growing economic status means such practical suggestions could win the backing of other Asean members.

The talks between Asean and China come as U.S. President Barack Obama plans a historic visit to Myanmar and will also attend a wider gathering of leaders in Cambodia, the East Asia Summit. Indonesia's foreign minister said the U.S. has struck the right tone in its handling of the tensions by staying neutral but flagging worries over ensuring access to the sea lanes, which are vital to global trade.

Asean Secretary-General Surin Pitsuwan didn't comment on the idea of countries sharing their plans to use the waters, but said a hotline would be a pragmatic way to ensure quick communication. Thailand—as country coordinator for China at Asean—would propose the idea to China, Dr. Pitsuwan said in interview Saturday.

"I think there is a momentum of goodwill…The fact that (concerned parties) have agreed to lower the decibel between themselves, that's already a good sign that they would work further in the direction of discussing some of these concrete issues, one by one," Dr. Pitsuwan said.

Other territorial tensions in Asia are being discussed, most notably a long-standing territorial conflict between Japan and China in the East China Sea. The spat over a group of islands, which Japan calls the Senkaku and China calls the Diaoyu, has heated up in recent months, sparking Chinese boycotts of Japanese goods and services, which are expected to cost Japanese companies heavily.

For now, no bilateral meeting has been scheduled between China's premier and Japanese Prime Minister Yoshihiko Noda.

"The heightening tensions (between Japan and China) are a great concern to Asean nations," Kimihiro Ishikane, Japan's ambassador to Asean, said in interview. "They are keeping a very close watch on how the two nations deal with the issue…because of their situation in the South China Sea."

Asean leaders also discussed ways to deepen economic integration through harmonizing laws and stripping down trading barriers, according to an official familiar with the talks.

Asean already has an agreement to eliminate all tariffs by 2015. But governments now want to start talks on deeper economic cooperation.

Among the early steps being considered are ways to harmonize rules, regulations and customs laws and eliminate other non-tariff barriers.

"It's a major step in thinking, because harmonizing rules for 10 countries with 10 different laws is something we know is very difficult," the official said, describing the talks as early stage. "The fact the leaders have started to raise it means there is some political will," the person said.

[Crafty_Dog]

China's Nationalist Wave
Beijing's naval aggression is a threat to peace in the Pacific. .

The risk of a serious naval confrontation in East Asia is rising. China recently announced guidelines, effective January 1, for its maritime "police" to board and seize foreign vessels in waters around the Paracel Islands, which are also claimed by Vietnam. On Tuesday, Hanoi responded with stepped up patrols and revealed that Chinese fishing boats had cut the cables of its seismic survey ship last week.

Philippines Foreign Minister Albert del Rosario revealed in an interview with the South China Morning Post published November 30 that China had communicated its intention to station ships permanently at the Scarborough Shoal, which is claimed by both countries and was the scene of a standoff earlier this year. Mr. del Rosario called China's behavior "dictatorial."

Beijing also continues to challenge Japan's control over the Senkaku Islands, known as the Diaoyus in Chinese. Chinese maritime surveillance and fisheries vessels loiter outside the 12-mile territorial limit, occasionally crossing inside to force the Japanese coast guard to respond.

When Beijing's campaign of assertiveness began three years ago, many observers believed it was either a miscalculation that would be corrected, or else a temporary phase related to jockeying for the recent leadership transition. It has proved to be neither.

What is driving Beijing? Chinese military men, who make up about 20% of the Central Committee, have become increasingly vocal about their desire to drive the U.S. out of their adjacent (and not-so-adjacent) waters. The Communist Party's longstanding rhetoric about ending a "century of humiliation" at foreign hands makes such calls difficult to ignore.

Another driver is the uneasy relationship between the military and their putative civilian masters. On Wednesday, new Chinese leader Xi Jinping publicly exhorted military officers to "put an end" to corruption and remain completely loyal to the Communist Party—a call that presumably would not have been necessary if such loyalty was not in doubt.

It's possible Mr. Xi is also uncomfortable with his navy's aggressive maneuvers. So far, however, the Party's response has been to buy off the military brass with huge annual budget increases. The new submarines and surface ships that these budgets purchase create pressure to deploy. Outgoing top leader Hu Jintao used his final report at last month's Party Congress to call for China to become a maritime power.

Perhaps most important is the revival of nationalism as a major theme in Chinese rhetoric. Mr. Xi has adopted "revival of the nation" as his first major slogan, signaling his intention to be a reform-oriented nationalist. Last week he led the Politburo Standing Committee on a visit to an exhibition on foreign imperialism at the National Museum, and his remarks suggest he wants to harness patriotic feeling to overcome political opposition.

The challenge for neighboring countries is how to respond. Failure to contest China's deployments risks conceding territorial claims under international law. But an overly assertive response might further inflame Chinese nationalism—or accidentally start a shooting war.

It doesn't help China's neighbors that they are increasingly outclassed by Chinese maritime forces. Japan is scrambling to reinforce its coast guard, and the Philippines wants more castoffs from the U.S. to cobble together a navy. For now, only the U.S. Seventh Fleet can deter Beijing's push to expand its territory.

To its credit, the Obama Administration has begun to shed the traditional U.S. posture of strategic ambiguity on these disputes. The Journal reported last week that a delegation to Beijing of retired officials led by former Deputy Secretary of State Richard Armitage delivered the message that while the U.S. has remained neutral on the sovereignty issue, it is treaty-bound to defend Japan's control over the Senkakus. The U.S. Senate followed last week with a vote for an amendment to reaffirm that commitment.

Across Asia, alarm bells are ringing that Beijing has abandoned Deng Xiaoping's pragmatic internationalism. One can hope Mr. Xi will be willing and able to rein in his military's increasing bellicosity. That is more likely if the U.S. and its allies remain united and determined to deter it.

[G M]

Boulevard of broken dreams: Now Beijing and Shanghai each have more multi-millionaires than Los Angeles

By Daily Mail Reporter
PUBLISHED: 23:02 EST, 8 December 2012 | UPDATED: 00:58 EST, 9 December 2012

..America is losing the millionaire's race.

A new report from WealthInsight shows Beijing and Shanghai each with more multimillionaires than Los Angeles.

The data measures the segment of the population worth $30 million or more.
 
Falling: Los Angeles now has fewer multimillionaires than Shanghai or Beijing
People with bank accounts of at least $30 million are known in the wealth-industry as 'ultra-high-net-worth individuals.'
Beijing has 1,318 people who fit that description, Shanghai has 2,028, and L.A. has a pitiful 950 people worth at least $30 million.
 More...Jamie and Nigella should give us recipes for leftovers to cut food waste, says minister
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But America still has New York, the city with the most 'ultra-high-net-worth individuals' at 2,929.
Still, Brazil, Russia, India and China are gaining.

Sao Paulo, Brazil, has 1,310 ultra-highs, which beats San Francisco, Washington and Miami put together.

 
City lights: The Shanghai Financial Center is tracking money from the city's exploding population of mulitmillionaires
 
City of gold: A lot of millionaires are sleeping in the city of Beijing
Moscow is even with Chicago for the wealthy, and Mumbai has surpassed Dallas.

Secondary cities such as Puna, Fuzhou and Chongqing could nearly double their numbers by the next presidential election.

Economists are still unsure whether this trend of shifting wealth from the West to the East will continue at its current rate, but WealthInsight says the millionaires in BRIC countries will boom at a 76 per cent growth by 2016.
 
Cash: BRIC countries are fast gaining people worth at least $30 million
That growth rate is twice that of the last four years.

India's millionaire populace will likely double to 511,000 and China's will grow 82 per cent  and Brazil's 40 per cent.
However economic slowdown and dicey stock markets could slow that growth with China especially susceptible to the market.

If China were to be hit, asset prices would tumble taking a sever chunk of millionaires out of the figures.


Read more: http://www.dailymail.co.uk/news/article-2245329/Boulevard-broken-dreams-Now-Beijing-Shanghai-multi-millionaires-Los-Angeles.html
Follow us: @MailOnline on Twitter | DailyMail on Facebook

[G M]

http://en.rian.ru/business/20121210/178055067.html

China’s Economy No. 1 by 2030: US Intelligence Report

WASHINGTON, December 10 (RIA Novosti) - China’s economy will likely surpass the United States as the world’s largest by 2030 while Asia will overtake North America and Europe combined in global power based upon “GDP, population size, military spending, and technological investment,” a US intelligence report said on Monday.

 

"Meanwhile, the economies of Europe, Japan, and Russia are likely to continue their slow relative declines," the “Global Trends 2030: Alternative Worlds” report issued by the U.S. government's National Intelligence Council stated.

 

The report also said China could be looking over its shoulder at India in less than 20 years.

“India’s rate of economic growth is likely to rise while China’s slows. In 2030 India could be the rising economic powerhouse that China is seen to be today.”

America’s international role will be uncertain in the future as it evolves and “whether the US will be able to work with new partners to reinvent the international system will be among the most important variables in the future shape of the global order,” the report stated.

The study also said that Russia could either modernize and integrate itself in a “wider international community” or there is potential that if the country “fails to build a more diversified economy and more liberal domestic order” it “could increasingly pose a regional and global threat.”

The study cites that “individual empowerment” will lead to the growth of a global middle class during the next 15 to 20 years, leading to poverty reduction, greater educational attainment and improved health care.

“The growth of the global middle class constitutes a tectonic shift for the first time, a majority of the world’s population will not be impoverished, and the middle classes will be the most important social and economic sector in the vast majority of countries around the world,” the study stated.

The global population is also estimated to reach somewhere close to 8.3 billion people, thus increasing the demand for food, water and energy by as much as 50 percent and “climate change will worsen the outlook for the availability of these critical resources.”

[DougMacG]

"China’s economy will likely surpass the United States as the world’s largest by 2030 ", if we don't ______________________________.  Fill in the blanks over on 'the way forward' threads.


We keep pursuing anti-growth while China is all about keeping economic growth going.  Not to be one-dimensional, but so-called communist China lowered it's corporate income tax presciently in Jan 2008 while the U.S. didn't know it was falling into a spiraling financial and then employment and fiscal crisis.  There tax rate was already below ours.  Japan lowered theirs this year, delayed a year by tsunami.  The US is worst in the world (for this one measure) http://www.reuters.com/article/2012/03/30/usa-tax-japan-idUSL2E8EU5VV20120330, knows better, and does nothing about it.

[Crafty_Dog]

Also to keep in mind:

a) The Chinese are turning their country into a toxic dump and spilling their pollution over into the planet as a whole;
b) their bookkeeping is cooked; and
c) they have one weird demographic profile.

[DougMacG]

Election yesterday, Shinzo Abe was elected Prime Minister.  (Pronounced Ah-bi)

“Japan is currently in a crisis in terms of the economy, diplomacy, education and recovery from the catastrophe in the northeast,” Abe said at a press conference in Tokyo. “The job we have been given is to break out of this crisis.”

"This result doesn’t mean that public support for the LDP has 100 percent recovered,” Mr Abe told NHK. “It’s a rejection of the last three years of political confusion. Now it’s up to the LDP to live up to people’s expectations.”

Japan is the world's 3rd largest economy, faces deflation, recession and an island dispute with China.  LDP was the ruling party for a half century, lost power 3 years ago.  Abe was Prime Minister 2006-2007, left with a stomach ailment.

"Abe’s platform had three main planks: massive public spending, “unlimited” monetary easing, and reform of Japan’s pacifist constitution."  http://blogs.the-american-interest.com/wrm/2012/12/16/abe-ldp-take-japanese-elections/

[Crafty_Dog]

Because the map in the article will not appear in the post here, I note that the islands in question are quite close to China and Taiwan and the origin of Japan's claim.  In short, in fairness I opine that we should note that the Chinese claim is not without intuitive merit.  I lack the knowledge necessary to opine on the issues presented in the context of international law.

======================================

A Dangerous Escalation in the East China Sea
China and Japan must act now to prevent a worsening territorial dispute from ending in armed conflict..
By STEPHANIE KLEINE-AHLBRANDT

The territorial dispute in the East China Sea between the world's second- and third-largest economies entered a disturbing new phase last month with the first direct involvement of military forces. On Dec. 13, Japan sent eight F-15 fighter jets after a small Chinese propeller plane that flew over the disputed Senkaku Islands, called Diaoyu in China. According to Japan, this was the first Chinese intrusion into its airspace since 1958.

There is far more at stake here than a small cluster of islands. Crisis mitigation mechanisms need to be urgently reinstated and communication increased between Beijing and Tokyo to reduce the risks of an accidental clash or escalation. China's continuous testing of Japan's bottom line is a dangerous game, and one that could have consequences for the U.S.-Japan security treaty.

 .Beijing is bolstering maritime patrols of the disputed waters in a challenge to Japan's de facto administration. First annexed by Japan in 1895, the small cluster of islands and barren rocks came under U.S. control after World War II but reverted back to Japan with the 1971 U.S.-Japan Okinawa Reversion Treaty. They became more desirable a few years earlier when it was discovered that undersea oil reserves might exist nearby. Taiwan also claims the islands, but has enjoyed more amicable overall relations with Japan, and Japan does not officially recognize Taiwan as a sovereign state.

The dispute between China and Japan reignited in September when the Japanese government announced it was finalizing the purchase of three of the contested islands from a private Japanese owner. The government did this mainly to keep the islands out of the hands of former Tokyo Mayor Shintaro Ishihara, a flamboyant nationalist who had announced that the Tokyo Metropolitan Government would bid on them.

Reacting with a series of what it called "combination punches," Beijing threatened economic retaliation, launched joint combat drills by its navy, air force and strategic missile corps, and refused to attend the annual meetings of the International Monetary Fund and the World Bank Group hosted by Tokyo in October. At the same time, violent anti-Japanese protests—the biggest since 2005—broke out across China.

China's most significant move was designed to end four decades of Japan's de facto control of the islands. Beijing announced base lines to formally demarcate its territorial waters and sent law enforcement ships into disputed waters. This new strategy is a stark departure from China's policy under Deng Xiaoping (Beijing's supremo from 1978 to 1992), which aimed to defer the dispute and seek joint exploitation of resources with Japan.

Deng's decision to put aside this fundamental disagreement reflected the deep challenges to resolving the issue of island ownership. Because the dispute is seen in China as related to Japan's imperial aggression, it awakens historical enmities and inflames Chinese nationalism. The Communist Party has long used past invasions and nationalism to bolster its legitimacy, making any negotiations over sovereignty extremely complex.

At the root of this new flare-up is a changing economic and power balance in East Asia. Seeing Japan on a downward slide while its own star is rising, China feels the time is right to stake its ground in the dispute. International law favors the country that has occupied or taken measures to exercise sovereignty. These include submitting claims to the United Nations, naming islands, making maps, conducting law-enforcement patrols, and eventually building structures and inhabiting islands. China believes that it has lost out while Japan administered the islands for decades.

Since Japan's purchase announcement, Beijing has taken legal and operational measures to strengthen its own hand. It is taking similar steps to bolster additional sovereignty claims in the South China Sea, as it clearly desires to become a greater maritime power.

Neither side has a solid legal case. Japan's claim to sovereignty on the basis of "discovery-occupation" centers on the assertion that it found no trace of habitation or control when it formally incorporated the islands in 1895. China claims that historical and legal evidence shows the islands were discovered, named and used during the Ming Dynasty (1368-1644), controlled by the Qing Dynasty in 1895, and seized in the context of Japanese wartime expansion. This, Beijing argues, means they must be handed over based on the post-World War II peace treaty that binds Japan to return Chinese territory.

Continued peace in the region hinges upon the two countries managing their differences. Cooperation on joint resource management in the East China Sea while setting aside—but not renouncing—maritime claims could be a practical way to build mutual trust and reap tangible benefits. In 2008, the two governments came close to such a deal but ultimately failed to overcome domestic nationalist opposition.

Before tensions flared, both sides had realized the danger of maritime accidents and were committed to setting up communications systems between their defense and law-enforcement bodies. But emotion prevailed over reason and those talks were abandoned.

Both China and Japan have stated that a military conflict is in no one's interest. That offers hope. Still, preserving peace requires urgent cooperation to avoid misfires and prevent an accident from escalating into a skirmish. A joint resource-development agreement would take time to negotiate, particularly given the steps needed to calm nationalist anger. But if the two sides are serious about avoiding armed conflict, common ground can still be found. Both Beijing and Tokyo have new leaders who have an opportunity to reduce tensions at sea. They should seize it.

Ms. Kleine-Ahlbrandt is China and Northeast Asia project director for the International Crisis Group.

[bigdog]

http://www.economist.com/news/leaders/21569740-risks-clash-between-china-and-japan-are-risingand-consequences-could-be?fsrc=scn/fb/wl/pe/dangerousshoals

from the article:

CHINA and Japan are sliding towards war. In the waters and skies around disputed islands, China is escalating actions designed to challenge decades of Japanese control. It is accompanying its campaign with increasingly blood-curdling rhetoric. Japan, says the China Daily, is the “real danger and threat to the world”. A military clash, says Global Times, is now “more likely…We need to prepare for the worst.” China appears to be preparing for the first armed confrontation between the two countries in seven decades (see article).

[G M]

http://www.economist.com/news/leaders/21569740-risks-clash-between-china-and-japan-are-risingand-consequences-could-be?fsrc=scn/fb/wl/pe/dangerousshoals

from the article:

CHINA and Japan are sliding towards war. In the waters and skies around disputed islands, China is escalating actions designed to challenge decades of Japanese control. It is accompanying its campaign with increasingly blood-curdling rhetoric. Japan, says the China Daily, is the “real danger and threat to the world”. A military clash, says Global Times, is now “more likely…We need to prepare for the worst.” China appears to be preparing for the first armed confrontation between the two countries in seven decades (see article).

The Chinese state media is banging the war drums loudly. China's leadership seems to expect Buraq to bow to them for some reason.

[Crafty_Dog]

Although IMHO The Economist is not what it used to be, this is the sort of piece which has always been the magazine's forte.

What madness the sequester cuts are going to be!   And the Reps have so mishandled things that this is on no-one's radar screen.

[G M]

Unless Japan has a secret robot army, they might as well start working on a face saving way to hand over whatever China decides it wants. Taiwan better look at becoming a nuclear power or negotiating a return to the"Motherland".