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China’s Investment Trap has Become a Major Concern in Central Asia

By Grete Mautner – New Eastern Outlook – May 26, 2018

Perhaps the most curious topic of today’s Central Asian agenda is the growing dependence of local states on Chinese loans, which would often be referred to in regional media sources as “means of neocolonialism.”

In recent years, China has visibly stepped up its involvement in the affairs of Central Asia states, taking advantage of both its loans and its soft power. However, Beijing is trying to pacify worried voices across the region terrified by the demographic and economic might of China. There’s no denying that Central Asia for China is among the most crucial regions, since it shares a common border with a number of regional countries that play a pivotal part in ensuring China’s security and supply of energy and resources.

Nobody is making a big secret today of the fact that China lends regional governments long-term loans with low annual interest rates that can get as low as 2%. Against the backdrop of those hard-to-get Western financial investments, there’s really no alternative to Beijing’s loans. However, those always come with strings attached, as China’s loans would often be provided to back up large infrastructure projects, with Beijing’s contractors demanded be involved, providing labor, logistics and technology.

This financial hegemony never seems to be after a swift return on investments, as it would be typically interested in getting the other state financially dependent. The debt that has grown with time can be restructured and paid through granting China access to raw materials or stakes in the national companies of those states that borrowed money from Beijing. But in what way does this differ from the classic colonial scheme when investments would often be repaid with natural resources and lands? It’s no wonder that the West is trying to do the same to Ukraine these days, demanding it to open the agricultural market to bring its fertile lands to the hammer.

Kazakhstan

There’s little doubt that Kazakhstan ranks first among regional states who’s national wealth relies on Chinese loans and direct investments. According to its national bank, Astana owed China the staggering 12.6 billion dollars at the beginning of this year.

Against the backdrop that China’s loans are granted on the condition of Beijing receiving access to this country’s raw materials along with stakes in a handful of national enterprises, the topic of Chinese loans remains by far the most uncomfortable for Kazakhstan to discuss publicly. The situation got even worse when in 2016 in local media sources announced that Kazakhstan was planning to put another 1.7 million hectares of land on sale, with spontaneous mass protests breaking out across the state, as no one believed that the land would not be sold to foreigners. These protests led to the adoption of moratorium on such sales until the end of 2021, but still such a possibility remains on the cards.

Kyrgyzstan

The American Center for Global Development published a report on China’s debtors last March, identifying a total of eight most financially vulnerable countries. Of the Central Asian countries, both Kyrgyzstan and Tajikistan made the top of the list, since the sheer amount of money they are bound to pay Beijing has surpassed 50% of their total foreign debt.

Last year, Bishkek‘s national debt reached the staggering rate of 65% of this Kyrgyz state GDP, with external debt making up to 90% of this total.

As it was announced at the meeting of the Parliamentary Committee on Budget and Finance of Kyrgyzstan in April, the total debt of Kyrgyzstan to China has reached 1.7 billion dollars. The sole largest outside creditor of Bishkek is China’s own Export-Import Bank, that can demand local politicians to hand a total of 470,000 dollars back at any given moment. Sure, China’s involvement in Kyrgyzstan would be unthinkable without large infrastructural projects like roads, electric power infrastructure, along with local industries like the oil refinery of Kara-Balta and gold mines of Taldy-Bulak Levoberezhny.

The country will have to pay China back at least 320 million dollars in the next five years. At the same time, local elected representatives would repeatedly stress the fact that back in the day when an agreement with the Export-Import Bank of China was drafted, those negotiating it were not really taking Kyrgyz interests into consideration, so there’s a chance that when the above mentioned period is over, Bishkek won’t have the money to pay its largest creditor. In addition, the agreement implies that all legal disputes between Kyrgyzstan and China are to be settled in the the Hong Kong arbitration court, which doesn’t make things any more promising for the debtor. Moreover, in the next couple years additional 300 million are to be spent on the servicing of the external debt of Kyrgyzstan, and, according to the local ministry of finance, the Kyrgyz Republic will be theoretically capable to repay its debt to China in the next quarter century or so.

The matter of the massive Kyrgyz debt to China is kept out of the public discussion in the country, as it can trigger massive protests. But since Bishkek has an abundance of natural resources in the form of gold, iron, rare earth metals and other deposits, Beijing doesn’t look too worried about the prospects of its involvement in the affairs of this state.

Tajikistan

In the regional media, Tajikistan is often being referred to as the “ultimate hostage of Beijing” or even “the Chinese colony”, along with all sorts of equally humiliating comparisons.

Dushanbe’s national debt to the Republic to China at the beginning of the year reached 1209.6 million dollars, which amount to 50% of the total foreign debt of Tajikistan.

China is eagerly making investments into Tajik energy and road construction projects, along with a wide range of other sectors, including aluminum production, cellular communications, and gold mining.

As for the repayment for this massive debt, China’s TBEA has recently received exclusive rights to mine the Upper Kumarg gold mine. Earlier, this same company obtained access to the East Douba deposits. TBEA will be extracting gold from these sites until it returns the funds invested in the construction of a large power plant in Tajikistan. Earlier, TBEA received similar rights on the mining of coal in Tajikistan. But now it’s talking gold.

In addition to natural resources and shares in national enterprises, Tajikistan can grant China control over its transport routes and lands. For instance, back in 2011 Tajikistan surrendered to China 1% of its total territory, which amounts to more than 400 square miles of once disputed lands in the Eastern Pamirs. China is particularly interested in those areas that are rich in minerals (uranium, gold, bauxite, asbestos, rock crystal and much more). Therefore, it is possible that China is going to be more that willing to explore various scenarios of Dushanbe fulfilling its financial obligations to it in the future.

Turkmenistan

This republic is being known as a place where China has occupied a dominant position in a number of financial fields. The country has virtually no other revenues on top of those that it receives from exporting natural gas to China, however this country’s closed nature makes further analysis virtually impossible.

Uzbekistan

Uzbekistan, perhaps, can be found in a list of less defendant states in the region when China’s loans are concerned. However, recently China has been trying to address this drawback, as Uzbekistan looks a much more promising market for investments than most its neighbors.

There’s no point in arguing that loans are an instrument of external pressure. And China is known for its way of never writing off debts, like Russia would often do. On top of this, Beijing has a large number of unresolved territorial disputes, like the ones with Kazakhstan, Tajikistan and Kyrgyzstan. And if we take into consideration the fact the return of China’s historic territories is part of Beijing’s foreign policy, one can not exclude the fact that land concessions in exchange for investments will remain among China’s most desirable aspect of its foreign policy in the Central Asia region.

Today, there are strong fears across the region that China, which has become one of the largest regional players and a principal partner can demand them to pay the whole sum, while  Beijing sees no reason to be finicky in its investments, but there’s those that don’t want to experience this.

May 26, 2018 Posted by | Economics, Timeless or most popular | , , , , , | 3 Comments

Guns vs. butter at Wuhan meeting

By M K Bhadrakumar | Indian Punchline | May 2, 2018

The anxiety syndrome in the American write-ups on the Wuhan summit is truly tragi-comic. An analyst at the Brookings Institution confidently predicted even before the summit between Prime Minister Narendra Modi and Chinese President Xi Jinping that the event was much ado about nothing. The US government-funded Voice of America in an analysis has now arrived at the same conclusion, after the summit. Why are these American analysts in such tearing hurry to debunk the Wuhan meeting?

It’s geopolitics, stupid! The prestigious Stockholm International Peace Research Institute (SIPRI) released a report today which says amongst other things that India’s defence spending rose by 5.5 per cent to US$63.9 billion in 2017, overtaking that of France as one of the world’s top five military spenders. The report estimates that one of the main motivations behind India’s plans to expand, modernise and enhance the operational capability of its armed forces lies in its tense relations with China.

From the US perspective, the situation is ideal to advance the business interests of America’s vendors of weaponry. Last year, business deals worth $15 billion were chalked up. Any improvement in India-China relations will profoundly hurt American interests. Fueling India-China tensions is a major objective of the US’ regional strategy.

Alas, there are Indians too who are eagerly serving the US interests. A prominent Chinese expert on South Asia recently wrote (in the context of the Wuhan meeting), “Many strategic elites in India are financially backed by the West and hence speak for Western countries.” It is a national shame, but true.

Be that as it may, these guys are missing the plot. Prime Minister Modi’s recent decisions to improve India-China relations, adjust India’s neighborhood policies and to rebalance India’s ties with the major powers are linked to his political agenda. Of course, the good part is that this agenda is also in the national interests.

Take India-China relations. The Voice of America is stupid to assume that the Wuhan meeting was about border tensions. No doubt, it is important that peace and tranquility prevails on the border with China. The Doklam standoff was an eye-opener for the political leadership. Hence the “strategic guidance” to the military issued from Wuhan (which is actually an order from the civilian leadership to the generals) to defuse confrontations during patrols in accordance with existing protocols and mechanisms. The military people may not like it, but that’s how a democracy prioritizes butter over guns.

Clearly, Modi’s top priority is about Chinese investments in India. The drivers of the Indian economy in our establishment played a decisive role in bringing about the strategic shift in the thinking toward China – and in preparing for the Wuhan meeting.

The fact of the matter is that China is already positioning itself as among India’s top investors. In 2017, despite Doklam, China tripled its investment to $2 billion. Bilateral trade touched $84.44 billion in 2017, which is an increase of 18.63% over 2016. (By the way, Indian exports to China went up by 40%.) This year, bilateral trade in the first quarter already hit $22.1 billion, up 15.4% year on year. In April, the two countries signed over 100 trade agreements, worth $2.38 billion, when a Chinese trade delegation visited India.

According to a report in Forbes magazine recently, India is courting Chinese companies to bridge its infrastructure deficit. Last year, China’s Sany Heavy Industry planned an investment of $9.8 billion in India, while Pacific Construction, China Fortune Land Development and Dalian Wanda planned investments of more than $5 billion each. Earlier this year, the China-led Asian Infrastructure Investment Bank approved funding of $1 billion for projects in India.

Meanwhile, Chinese investors have been pouring money into sectors outside the remit of government agencies. In 2015, Alibaba invested $500 million in Snapdeal and $700 million in Paytm. In 2016, Tencent invested $150 million in Hike, a messaging app, and a consortium of Chinese investors paid $900 for media.netIn 2017, Alibaba and Tencent announced or closed deals valued close to $2 billion—Alibaba’s second tranche of $177 million in Paytm, $150 million in Zomato, $100 million in FirstCry and $200 million in Big Basket. Tencent’s investments included $400 million in Ola, $700 million in Flipkart and a second round of investment in Practo. Last year, China’s drug giant Fosun Pharma acquired a 74% controlling stake in India’s Gland Pharma for $1.1 billion. Chinese smartphone makers Xiaomi, Huawei and Oppo all are operating manufacturing plants in India, and have had great successes in Indian market, too.

These plain facts may not be significant enough for our ‘China hands’, but they are a compelling reality for the PMO and North Block. Let me quote from the report in the Forbes magazine:

  • Seemingly, there’s a shared belief in both countries (India and China)  that a position of hostility undermines their interests, and stabilizing relations at a time of global uncertainty will yield economic dividends. India’s competitive edge in information technology, software and medicines, and China’s strengths in manufacturing and infrastructure development make the two sides natural partners…

By the way, it is yet to sink in that the single most far-reaching outcome of the Wuhan meeting could be that India is sidestepping the CPEC controversy and is moving on to join hands with China in the construction of the so-called Five Nations Railway Corridor connecting Xinjiang with Iran. It is a prestigious flagship project of the so-called Silk Road Economic Belt, which was proposed by President Xi Jinping in 2013. Conceivably, this could be the first step in a long journey. China has shown great interest in developing economic corridors to India across Nepal and Myanmar.

To be sure, Modi travelled to Wuhan with the “big picture”. Read a perspective on the Wuhan summit featured in the CNBC entitled China and India are trying to write a new page of the world economy, here.

May 3, 2018 Posted by | Economics | , , , , | Leave a comment

Missile attacks on Syria in breach of international law, China says

Press TV – April 16, 2018

China has strongly condemned the latest missile strikes by the United States along with its allies Britain and France on crisis-hit on Syria, stating the military aggression violates the basic principles and norms of international law.

Addressing reporters during a press conference in Beijing on Monday, Chinese Foreign Ministry spokeswoman Hua Chunying said any military action that bypasses the UN Security Council is in breach of international law, and only complicates the Syrian conflict.

“Under the UN Charter, there are clear statements about the circumstances in which the use of force is permissible. The military strikes launched by the United States, the UK and France violate the basic principles of international law to ban the use of force and violate the UN Charter.

“The use of force under the pretext of punishing and retaliating the use of chemical weapons also violates international law as present international law also bans the use of force in retaliation for illegitimate actions. Bypassing the United Nations Security Council, and under the pretext of adopting a unilateral humanitarian intervention also violate international law,” she said.

The senior Chinese official noted that her country believes a comprehensive, impartial and objective investigation should be carried out into the alleged chemical weapons attack against the city of Douma, located about 10 kilometers northeast of the Syrian capital Damascus.

“China’s stance on chemical weapons is clear. We oppose to the use of chemical weapons by any country, any organization or anyone for any purpose. China advocates a comprehensive, impartial and objective investigation into the suspected use of chemical weapons so as to reach a reliable conclusion that could withstand the test of time and facts,” Hua said.

“We support an on-site investigation to Syria by a group from the Organization for the Prohibition of Chemical Weapons (OPCW). Before that, all the parties cannot make a pre-judgment,” she pointed out.

Hua further described a political settlement as the only realistic option to resolve the Syrian crisis.

“I want to stress that there is no way out for any military solution to the Syrian issue as a political solution is the only realistic choice. Any attempt to resort to the use of force can only intensify regional tensions and complicate the issue,” the Chinese Foreign Ministry spokeswoman noted.

Early on Saturday, the US, Britain and France carried out a string of airstrikes against Syria over a suspected chemical attack against Douma. Washington and its allies blamed Damascus for the suspected assault.

The Syrian government has strongly denied the allegation, calling on OPCW to send a fact-finding mission for investigations.

However, the US and is allies carried out the strike on the day the mission just arrived in Damascus.

Pentagon said in a statement that at least 58 missiles had struck Shayrat airbase in the western Syrian city of Homs. An unnamed US official said Tomahawk missiles were used in the strikes.

The United Kingdom’s Royal Air Force said four Tornado GR4s fighter jets joined the operation, while France said it had deployed Mirage and Rafale fighter jets.

Russian General Staff spokesman General Sergei Rudskoy, however, said Syrian air defense systems had intercepted at least 71 cruise missiles fired during the US-led aggression.

Speaking at a news conference in Moscow on Saturday, Rudskoy said at least 103 cruise missiles, including Tomahawks, had been fired into a number of targets in Syria.

“Russia has fully restored the air defense system of Syria, and it continues to improve it over the last six months,” he said.

April 16, 2018 Posted by | Timeless or most popular, War Crimes | , , , , | 1 Comment

Russia Stood Alone. China Didn’t Help Vote Down Trump’s Syria UN Resolution

By Marko Marjanović | Checkpoint Asia | April 11, 2018

Russia’s proposed UN Security Council resolution envisaging a speedy and realistic investigation into Douma incident was voted down by a triple veto. US, UK and France all voted against it.

However an earlier US-proposed resolution, which proposed an investigation mechanism that couldn’t possibly work and would have opened an avenue for the American use of force had to be vetoed by Russia alone. Bolivia was the only other nation to vote against it as China merely abstained.

China did so albeit it had previously called for restraint and for no side to resort to force which should have naturally made it predisposed to oppose the American resolution. Likewise the Chinese did so albeit the newly-appointed Chinese defense minister was in Moscow talking up ties between the two armed forces and countries.

It has long been Chinese philosophy not to stick its neck out at the UN. Beijing rarely vetoes anything that does not concern its immediate interests and never alone. Additionally China has its own, more immediate American problems right now with Trump threatening a trade war and is presumably reluctant to provoke the US president into further enmity. Finally it is clear that in Beijing’s strategic calculation China benefits with the US and Russia at each other’s throats.

With US distracted by hostility towards Moscow it can not afford to at the same time act too aggressively against China, while the US pressure on Russia means Moscow has little choice but at least ensure the friendship of China.

Nonetheless, things are looking pretty grim for Russia right now (let’s not kid ourselves, in the Middle East the Empire holds escalation dominance) and a little support, no matter how symbolic, could have gone a long way towards securing long-term Russian appreciation. An opportunity missed for Beijing.

April 11, 2018 Posted by | Aletho News | , , , | Leave a comment

A Trump-Putin summit is just what’s needed

By M K Bhadrakumar | Indian Punchline | April 2, 2018

The Chinese commentators consistently paint a pessimistic outlook for the troubled relations between Russia and the West, which no doubt form a crucial template of Beijing’s foreign policy. China is a “stakeholder” in the tensions between Russia and the West. Beijing must be acutely conscious that there has always been a significant (albeit not influential currently) school of opinion in the West, including in the United States, that a rapprochement with Russia will make sound long-term strategy to effectively contain China’s rise, which must be the West’s top priority.

Nonetheless, a news analysis by Xinhua with a Moscow dateline has simply gone overboard in making some hasty conclusions about the state of play in the backdrop of the Skripal spy case that has suddenly invaded the centre stage of Russia’s ties with the West:

·       With the inertia of the sanctions spiral going on, Russia and the West are expected to continue the hostility in the diplomatic sphere and even expand it to other areas that are more painful for both sides in the foreseeable future.

·       Although the question hanging over the spy-poisoning attack remains unanswered, one thing is for sure: Russia’s reputation has been damaged in the eyes of the international community while the alliance between the United States and Europe has been consolidated… It is widely expected that the tensions between Russia and the West will not ease off anytime soon. 

Is the state of play so hopeless? Xinhua has exaggerated. Things look gloomy but are not beyond salvation. Russia’s tensions with the West are actually not so serious as China’s own tensions with the West. But then, China is much smarter than Russia in its diplomacy in finessing these tensions. China also has the advantage that it was not a Cold-War adversary of the West in the sense in which the former Soviet Union got pitted in the “bipolar” world. China did splendidly well to exploit the rivalry between the US and USSR.

Russia is the main target today, because it is also the only power that has the capability to maintain global strategic balance and it has an ideological position with regard to the US’ hegemony, which it is determined to uphold no matter the costs involved — although Russia is not a communist country any more. Besides, Russia is not like any other country. It is a European power historically, culturally, economically and politically. And Russia’s habitation and name in a common European home profoundly impacts the US’ transatlantic leadership role.

China being an Asiatic country can run with the hare and hunt with the hound – making the best of both worlds by keeping a quasi-alliance with Russia while also on parallel track going in top gear to tap into the western markets to get fatter and richer. China’s supreme advantage is that it lacks any ideology (other than nationalism and self-interests). Russia takes a principled stance but China keeps its head under the parapet if its interests are not affected. If the tensions run high in Russia’s relations with the West, China is its beneficiary.

However, Russia’s tensions with the West over the Skripal case are more complex than what Xinhua has reported. It is discernible that European countries have been reluctantly dragged into the Skripal case. (Blood is thicker than water, after all.) The big question is how far the US collaborated with Britain. In my assessment, the jury is still out.

There are unanswered, unanswerable questions. The most important thing is that the Skripal case might have got dovetailed with the “anti-Trump” project of the Washington establishment. In particular, was this the swan song of Lt. Gen. HR McMaster (who was expecting dismissal for the past several weeks)? Is it a counterattack by the “Deep State” to keep Trump off balance just when he began making moves to put together a new team in his cabinet with a view to force his will on foreign policies?

Has there been an orchestrated (Anglo-American) attempt involving the intelligence agencies to force Trump’s hands? How much is the Skripal case entangled with the campaign over Trump’s “collusion” with Russia? Most important, where exactly does Trump himself stand in all this?

To my mind, Trump is not seeking confrontation with Russia, and if anything, his phone call to British PM Theresa May might have had a salutary effect on London, which has since noticeably piped down on the Skripal file. Read the White House readout of the phone call, here. There is no trace whatsoever here that Trump is traveling on a path of confrontation with the Kremlin.

In fact, neither Trump nor Vladimir Putin wants this “to be going beyond hysteria over diplomacy” – to borrow words from Xinhua. Trump has always had great conceptual clarity in his mind that it is China – and not Russia – that is the US’ real adversary.

Any longtime observer of Russian-American relations would know that most of the time things are never really what they’ve appeared to be on surface. The two big powers are greatly experienced in navigating through choppy waters. Therefore, it comes as no surprise to me that TASS has just at this juncture highlighted the prospect of a summit between Trump and Vladimir Putin.

Given the longstanding media culture in Moscow, it is inconceivable that the state news agency would have carried such a report on its own volition reflecting on the Kremlin leader. There is, for sure, some very serious “signaling” going on.

April 2, 2018 Posted by | Aletho News | , , , | Leave a comment

China becomes Trump’s indispensable partner

By M K Bhadrakumar | Indian Punchline | March 29, 2018

On Wednesday, the Chinese ambassador to the United States briefed the National Security Council in the White House regarding the visit by the North Korean leader Kim Jong Un to Beijing. The White House Press Secretary Sarah Sanders later expressed cautious optimism that in their estimation, “things are moving in the right direction” and the meeting in Beijing between Kim and Chinese President Xi Jinping was “a good indication that the maximum pressure campaign (on North Korea) has been working.” She said:

  • You saw him (Kim) leave for the first time — since becoming the leader of North Korea — for that meeting. And we consider that to be a positive sign that the maximum pressure campaign is continuing to work. And we’re going to continue moving forward in this process in hopes for a meeting down the road.
  • Certainly we would like to see this (end-May meeting between Trump and Kim). Obviously this is something of global importance and we want to make sure that it’s done as soon as we can, but we also want to make sure it’s done properly. And we’re working towards that goal. As we’ve said before, the North Koreans have made that offer and we’ve accepted, and we’re moving forward in that process.

Trump himself gave thumbs-up. He tweeted: “For years and through many administrations, everyone said that peace and the denuclearization of the Korean peninsula was not even a small possibility. Now there is a good chance that Kim Jong Un will do what is right for his people and for humanity. Look forward to our meeting!”

Evidently, Beijing transmitted some extraordinarily hopeful tidings. The remarks by former US state secretary James Baker (who still remains an influential voice in the conservative spectrum) praising China’s role suggests that Beijing is moving in tandem with the Trump administration. In an exclusive interview with NBC News, Baker said:

  • “I think it’s too bad that there wasn’t some way that we could work with the Chinese to achieve this, this result of denuclearization of the peninsula. China is the only country in the world that really has any influence, significant influence on North Korea.”
  • “I would have sent some high-level envoy to Xi Jinping, the president of China, that the Chinese trust and have confidence in. And I would have said, ‘Look, you don’t like what’s going on in the Korean Peninsula. We don’t like what’s going on. Why don’t we cooperate to stop it?”
  • “We, the United States, will support any government you (China) install in North Korea, provided they repudiate the acquisition or maintenance of nuclear weapons. We will trade with that government, we will establish diplomatic relations, we will execute a peace treaty ending the Korean War. Your (China’s) job is to put a government in place there that is different than this government.” (See the video of the interview.)

There is great poignancy here in these remarks because Baker had played a key role under President Ronald Reagan (Trump’s role model) negotiating the end of the Cold War in the 1980s face to face with Mikhail Gorbachev.

China has positioned itself brilliantly as the facilitator-cum-partner-cum-ally-cum-friend – depending on who its interlocutor on the Korean Question happens to be. Xi deputed politburo member Yang Jiechi as his special envoy to visit Seoul to brief the South Korean leadership, even as preparatory talks for the inter-Korean summit in April were scheduled in the DMZ in Panmunjom. Evidently, Yang had a hand in the positive outcome today at the Panmunjom meeting where there is agreement to schedule the inter-Korean summit on April 27. (here and here)

Quite obviously, there are processes today that are beyond the US’ control. Again, the US’ number one ally in Northeast Asia – Japan – has been marginalized. No one set out from Beijing to brief Tokyo. Inevitably, there are conspiracy theories. The London Times newspaper resuscitated today the hackneyed thesis that China is driving a wedge between the US and South Korea. But that seductive conspiracy theory underestimates that China is, in actuality, playing for far higher stakes in its rise on the global stage as a great power.

To be sure, history is in the making. If, as Baker says, the US is willing to normalize with North Korea and conclude a peace treaty to bring the Korean War to a formal end, the raison d’etre of continued US military presence in South Korea (on which there is significant local opposition already) becomes unsustainable. That impacts the overall US power projection in Asia. Again, if the North Korean problem is resolved peacefully, can the Taiwan Question be far behind?

Equally, China must know that there is no quick fix to the North Korean problem and it suits China to leverage the US’ critical dependence on its cooperation for the long haul – which in turn can stabilize the Sino-American relationship itself and open a new era of big-power relationship based on trust, mutual respect and sensitivity to each other’s core interests, which Beijing has been assiduously seeking.

On the other hand, Trump is well aware that if he can swing a deal on North Korea, it will significantly boost his re-election bid in 2020. Wouldn’t China know it, too? (Read my column in The Week magazine recently – The art of the Korean deal.)

March 30, 2018 Posted by | Aletho News | , , , , , | Leave a comment

China gives shock therapy to US

By M K Bhadrakumar | Indian Punchline | March 28, 2018

Just as a hypothesis was appearing that the United States “marginalized” China in the processes surrounding the North Korean situation, it gets blown to smithereens. The North Korean leader Kim Jong Un’s “unofficial” three-day visit to Beijing is a stark reminder that China is becoming even more central than before in the resolution of the tensions on the Korean Peninsula.

A profound reset of the power dynamic in the Asia-Pacific and internationally has taken place between Sunday and Wednesday. Questions arise as regards the exquisite timing of Kim’s first-ever visit to Beijing, its rich symbolism in this being his first-ever journey abroad after taking the reins of power seven years ago, and what it means.

Both Beijing and Pyongyang must be acutely conscious of the timing. The Xinhua dispatch on the visit cited both Chinese President Xi Jinping and Kim openly noting the regional backdrop. Xi noted that this is “a special time” when “positive changes had taken place on the Korean Peninsula”. Kim noted that “the Korean Peninsula situation is developing rapidly and many important changes have taken place” while “a series of major and happy events” have occurred in China too.

The three key elements discernible from the unusually long 2600-word Xinhua report are:

  • Both China and North Korea sense that an open display of fraternal ties is necessary and can be advantageous.
  • The ties by far exceed a friendly inter-state relationship. Xi pointedly recalled the past when the two leaderships “maintained close exchanges and paid frequent calls on each other like relatives.” Equally, ideological affinities were stressed. Kim recalled his father and grandfather. There is an attempt to hark back to the past fervor in the relationship, which is thought to have been a bygone era.
  • Most important, Kim committed himself to the “denuclearization of the Korean Peninsula”. But he added the expectation that Seoul and Washington should also respond with goodwill and create an atmosphere of peace and stability on the basis of “progressive and synchronous measures for the realization of peace.” In return, he secured China’s assurance of support “no matter how the international and regional situation changes.”

No doubt, Kim received an exceedingly warm welcome with several politburo members in attendance. Kim said “he felt he should come in time to inform Comrade General Secretary Xi Jinping in person the situation out of comradeship and moral responsibility.” Xi remarked, “I am willing to keep frequent contacts with Chairman through various forms such as exchange of visits.” Xi and Kim have personally pledged to mentor the relationship and a line of communication opens directly between them. Xi is staking his prestige.

Xinhua made no reference to President Donald Trump or his tentative plan to meet Kim in end-May (although surely, the topic would have figured in the talks.) On the other hand, Xi voiced support for the improvement of inter-Korean ties and peace talks. China’s support strengthens Kim’s hands in the upcoming negotiations with his South Korean counterpart President Moon Jae-in.

Kim has once again shown astuteness and statesmanship by securing China’s support precisely just when it matters most to him. Significantly, Kim’s visit to Beijing comes at a time when the US-China relations are buffeted by adverse currents – Trump’s threat of trade war, the Taiwan Travel Act (designed to encourage high-level contacts between Washington and Taipei), and the US Navy’s freedom of navigation operation last weekend within 12 nautical miles of Mischief Reef in the Spratly archipelago.

Kim’s visit to Beijing coincided with China’s Liaoning carrier strike group of more than 40 other warships and submarines conducting drills off the coast of Hainan in the South China Sea in a substantial show of force. Even as Xi and Kim were holding talks, Chinese Premier Li Keqiang called on a visiting US Congressional delegation to “play a constructive role and work with China to maintain the political and public opinion foundations for China-US relations.”

The US faces a dilemma in the weeks ahead. The recent reshuffle in the State Department and the National Security Council has added to the disarray within the Trump administration. The huge uproar in public opinion over the appointment of John Bolton as the NSA is not helping matters, either. On the other hand, US-Russia tensions are cascading. No one knows whom to dial in Washington.

Beijing is plainly disdainful of Trump’s attempts last week to flex muscle. The signs are that Trump is already backtracking. The Foreign Ministry spokesperson Hua Chunying was rather “forceful” in her remarks on Tuesday: “I must stress that negotiation is by no means an occasion for one party to make requests in an arrogant and condescending way.”

Having extended a big hand of support, Beijing is enabling Kim to approach the negotiating table from a position of advantage. An editorial in the Global Times notes that a “friendly relationship between China and North Korea is an important strategy to protect their interests… which can enhance regional balance and eliminate some unrealistic motives.”

Kim isn’t going to be a pushover for Trump. There is speculation among US analysts that Trump may not want to square up to Kim just yet. But then, wriggling out of engagement may not be easy if the inter-Korean summit in April creates new momentum for peace. How Trump gets filled in on Xi’s talks with Kim may show which way the wind is blowing.

March 28, 2018 Posted by | Timeless or most popular | , , , | Leave a comment

India doesn’t need a working relationship with US Central Command

By M K Bhadrakumar | Indian Punchline | March 23, 2018

The Indian media reported that following the 2+2 talks in Washington last week at the level of the foreign and defence secretaries of India and the US, a “path-breaking” decision has been firmed up to station a naval attaché at the US Naval Forces Command (NAVCENT) in Bahrain. The Defence Ministry officials in Delhi have reportedly said that the Indian attaché’s mandate will be to ‘ensure that the US and Indian navies are on the same page’ and to ‘ensure better coordination and logistic support for warships and aircraft carriers of the two countries.’

The NAVCENT, which comes under the US Central Command, has an area of responsibility that comprises the Red Sea, Gulf of Oman, Persian Gulf and Arabian Sea. The US Navy’s Fifth Fleet based in Bahrain is in charge of naval operations in the Persian Gulf region, Afghanistan and Pakistan. The highly secretive American base at Diego Garcia deep down in the Indian Ocean provides the underpinning for the NAVCENT.

If the proposed Indian deputation to the NAVCENT takes place, the US Pacific Command and Central Command will ‘share’ India, which would signify India’s growing importance to the US’ global strategies. The NAVCENT is currently fighting wars in Yemen, Syria, Iraq and Afghanistan. But then, India has nothing to do with any of these wars.

Does the US-Indian project to monitor the movement of Chinese ships in the Indian Ocean warrant such a step? Can’t we keep a tab on the Gwadar naval base without an attaché deployed to Bahrain? Are we contemplating force projection in the Indian Ocean?

On the other hand, this decision drips with profound symbolism and will be noted keenly by all regional states – especially, Iran and Pakistan – and global powers – Russia and China, in particular. Indeed, the stunning part is that, sadly, our policymakers can be so myopic about the country’s geography and the dangerous security environment surrounding it.

All indications are that a major escalation of the war in Syria is imminent. Tensions are rising alarmingly and last weekend Moscow openly warned of retaliation against US targets if it again attacked the Syrian government forces. Only two days ago, Russian Deputy Defence Minister Sergei Ryabkov said in Moscow, “We have been warning the United States about the need to abandon these plans unconditionally. Any illegal use of force… would be an act of aggression against a sovereign state.” Read the latest analysis by the Russian think tank on security issues entitled The Russian Military Warns: a Major War in Syria Is Imminent.

Again, there are sub-plots – the US plans to balkanize Syria with the help of Kurds and Turkey’s trenchant opposition to it; the US-Israeli strategy to contain Iran’s influence in Syria, Iraq and Lebanon; the NATO’s intent to evict Russia from its Syrian bases and Eastern Mediterranean and so on. Furthermore, it is only the US military support that is sustaining the brutal war waged by Saudi Arabia and the UAE in Yemen. A recent op-Ed in the Washington Post co-authored by 3 senior US senators – Bernie Sanders, Mike Lee and Chris Murphy says: “U.S. military is making the crisis (in Yemen) worse by helping one side in the conflict bomb innocent civilians… U.S. forces are coordinating, refueling and targeting with the Saudi-led coalition, as confirmed last December by Defence Secretary Jim Mattis.”

Above all, what India needs to be most vigilant about is the real possibility of a US-Iranian confrontation as a near-term scenario. The appointment of John Bolton as the new US National Security Advisor is indeed ominous. Read an analysis by the well-known investigative journalist and author Gareth Porter in the American Conservative entitled The Untold Story of John Bolton’s Campaign for War With Iran.

Our faujis are besotted with Uncle Sam. For the lucky bloke who gets the slot in Bahrain it may be an attractive ‘phoren posting’, but for India what does it add up to? India will be foolish to get entangled in the US’ military adventures. It simply won’t cut ice to say our chap will remain single-mindedly focused on the movement of Chinese ships.

Politics is largely a matter of perceptions. India gains nothing by displaying a working relationship with the US Central Command when the gathering storms on the horizon are already visible to the naked eye. The prudent thing will be to begin preparations to sequester our country from collateral damage when the tsunami actually arrives. Only fools rush in where angels fear to tread.

March 24, 2018 Posted by | Militarism, War Crimes | , , , | 2 Comments

China Banning People From Transit for Bad “Social Credit” Scores

corbettreport | March 18, 2018

The slow-motion train wreck of “social credit” systems and the “gamification” of society has moved to the next stage. Now the Chinese government is going to start barring people from flying or riding trains if their social credit score is not up to snuff. China may be the test case for these ideas, but they’re already being rolled out in other countries. So what are we going to do about it?

SHOW NOTES: https://www.corbettreport.com/?p=26449

March 19, 2018 Posted by | Civil Liberties, Full Spectrum Dominance, Timeless or most popular, Video | , , | 1 Comment

US Senate Warns Russia of Sanctions if S-400 Sold to Any Foreign Nations

Sputnik – 17.03.2018

WASHINGTON – A group of US lawmakers led by Senator Bob Menendez told the State Department in a letter that any sale of Russian S-400 air defense system should lead to new punitive measures as stipulated in the Countering America’s Adversaries Through Sanctions Act (CAATSA).

“We are writing today to specifically inquire about reported negotiations between Russia and certain countries over sales of the Russian government’s S-400 air defense system and whether these reported deals could trigger mandatory CAATSA sanctions,” the letter said on Friday. “Under any circumstance, a S-400 sale would be considered a ‘significant transaction’ and we expect that any sale would result in designations.”

The lawmakers also requested that the State Department provide detailed analysis on the current status of Russian S-400 talks with China, Turkey, India, Saudi Arabia, Qatar, and any other country.

The senators based their letter on a report produced by the Congressional Research Service, which showed that Russia has been working on potential defense deals with different countries.

Menendez and co-signers demanded information on how the State Department is trying to prevent the sales of S-400 being finalized and reiterated Washington’s accusations of Russia’s aggression in Ukraine and meddling in democratic process in foreign states.

The request comes just a day after the Treasury Department used the CAATSA legislation, along with an Executive Order that was amended by CAATSA, to impose sanctions on five entities and 19 individuals.

Russia’s Federal Security Service (FSB), Main Intelligence Directorate and six Russian individuals were sanctioned under the CAATSA legislation.

The US Congress passed CAATSA last summer in response to allegations that Russia sought to influence the 2016 US presidential election. Trump signed it into law on August 2.

Russia has repeatedly denied all allegations of interference in the US election, calling the accusations “absurd.”

March 16, 2018 Posted by | Militarism, Timeless or most popular | , , , , , , , | 4 Comments

US in Afghanistan to Influence Russia, Iran, China – Russian Foreign Ministry

Sputnik – March 14, 2108

The United States retains its presence in Afghanistan to exert influence on neighboring countries and regional rivals – namely, Russia, Iran and China, Russian Foreign Ministry’s Second Asian Department Director Zamir Kabulov told Sputnik in an interview.

“In our opinion, the United States is in Afghanistan primarily with the aim of controlling and influencing the political processes in its neighboring countries, and also demonstrating its power to its regional competitors, primarily China, Russia and Iran. The United States is clearly trying to achieve destabilization of Central Asia and later transfer it to Russia in order to subsequently present itself as the only defender against potential and emerging threats in the region,” Kabulov said.

According to the diplomat, Russia and other countries neighboring with Afghanistan have questions about the true goals and time frame of the US military presence in the Central Asian country.

“If the United States and its NATO allies intend to continue their destructive policy in Afghanistan, this will mean that the West is heading toward the revival of the Cold War era in this part of the world. We closely monitor the developments and are ready to respond in cooperation with our partners and other like-minded people,” Kabulov noted.

The diplomat pointed out that Washington still failed to understand that the Afghan conflict could not be resolved solely by military means, stressing that it was impossible to defeat the Taliban by force.

Moscow is puzzled by the attempts of the United States and NATO to persuade Afghanistan to replace Russian weapons and military equipment, such move leads to reduction of Afghan’s military potential, Zamir Kabulov told Sputnik in an interview.

“The course taken by the United States and NATO to persuade Kabul to replace Russia-made small arms and aircraft is surprising, as it will inevitably lead to a decrease in the combat capabilities of the Afghan armed forces and further deterioration of the situation,” Kabulov said.

The diplomat reminded that a bilateral intergovernmental agreement on Russia’s defense industry assistance to Afghanistan had entered into force in November 2016, adding that the document created the legal framework for Russian assistance in arming and equipping the Afghan security forces.

“At the moment, negotiations are underway on repairs and supplies of spare parts for the Afghan Air Force’s helicopters for various purposes, produced in Russia (the Soviet Union),” Kabulov added.

Afghanistan Parliamentary Election

The parliamentary election in Afghanistan is unlikely to take place in July in the current circumstances, Kabulov said.

“I do not think that the parliamentary elections in Afghanistan will be held in July this year as scheduled. The Taliban continue to control about half of the country’s territory, engage in hostilities, organize and carry out terrorist attacks in large cities, and, apparently, are not going to make compromises and reconciliation with the Afghan government,” Kabulov said.

Afghanistan’s Independent Election Commission (IEC) is also unlikely to accomplish all the necessary procedures before the date set for the vote, given that the commission has announced earlier that the registration of voters will complete only by early August, the diplomat noted.

Furthermore, disagreements between the presidential administration and its political opposition regarding the parameters of the upcoming elections still remain unresolved, the official noted.

“In my opinion, if elections are conducted in the current circumstances, their results will not improve the political situation in the country and confidence in the current government, will not force the armed opposition to cooperate with the government,” Kabulov added.

The diplomat also noted that the Daesh terror group posed a serious threat to holding the election.

“The Daesh jihadists pose a serious threat to the security of the conduct of elections, especially in the north and a number of eastern provinces of Afghanistan. Some polling stations in the provinces of Helmand, Uruzgan, Kunduz, Badakhshan, Faryab and Ghazni are the most problematic in terms of security, according to the IEC data. I think that, in fact, the list of problematic areas in terms of organization of voting is much longer,” Kabulov said.

Afghanistan Reconciliation Talks

Russia considers the so-called Moscow format of talks an optimal platform for the promotion of national reconciliation in Afghanistan, Zamir Kabulov noted.

“Unfortunately, the existence of a large number of international formats on the Afghan issue has not significantly contributed to the involvement of the Taliban in peace negotiations. In this regard, we consider the Moscow format of consultations launched by us in early 2017 as the optimal platform for substantive negotiations to promote national reconciliation and establish a constructive dialogue between the government of Afghanistan and the Taliban movement,” Kabulov said.

Kabulov also noted that Moscow considered the format of talks in the Afghan capital as one approach toward achieving a collective solution to the problems surrounding Afghan settlement.

“A signal of international support for the resolution of the intra-Afghan conflict through political dialogue with the government of Afghanistan has been sent to the Taliban. The Taliban ignored the recent meeting of the ‘Kabul process’ in the Afghan capital, insisting on direct talks with the United States,” the diplomat added.

In February 2017, Russia, China, Pakistan, Iran, India and Afghanistan came together in Moscow for talks to promote the national reconciliation process in Afghanistan through regional cooperation with Kabul in the leading role. Apart from the aforementioned states, the latest round in April gathered five Central Asian countries: Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan. The United States refused to take part in the meeting.

Afghanistan has long suffered political, social and security-related instability because of the simmering insurgency, including that of the Taliban, but also because of the actions of the Daesh terror group.

The United States has been in Afghanistan for almost 17 years following the 9/11 attacks. Before his election, Trump slammed sending US troops and resources to the Central Asian country.

March 14, 2018 Posted by | Aletho News | , , , , , , , , , , , | Leave a comment

Australia sees opportunity in China’s rise

By M K Bhadrakumar | Indian Punchline | February 27, 2018

From an Indian perspective, the visit to the United States by the Australian Prime Minister Malcolm Turnbull and his meeting with President Donald Trump on February 23 turns out to be a reality check on the power dynamic in the Asia-Pacific. Australia is torn between two vital partners – the US in the security sphere and China in the economic sphere. The dilemma is acute insofar as Turnbull has voiced opinions on threat perceptions regarding China, which are contrary to the Trump administration’s assessment and, yet, the US and Australia are key allies.

A month ago, Australian Foreign Minister Julie Bishop pointedly distanced her country from the US’ assessment of China (and Russia) being a strategic threat. The US National Security Strategy issued in January said, “China is a strategic competitor using predatory economics to intimidate its neighbors while militarizing features in the South China Sea… It is increasingly clear that China and Russia want to shape a world consistent with their authoritarian model — gaining veto authority over other nations’ economic, diplomatic, and security decisions.”

Bishop refused to share that assessment, saying, “We have a different perspective on Russia and China clearly — we do not see Russia or China posing a military threat to Australia, we continue to work closely with China in fact we undertake military exercises with China as well as with other countries in the region and we will continue to do so.”

Turnbull openly endorsed Bishop’s remarks. In his words, “Apart from North Korea, there is no country in the region that shows any hostile intent towards Australia,” Mr Turnbull said, “We don’t see threats from our neighbours in the region, but, nonetheless, every country must always plan ahead and you need to build the capabilities to defend yourself, not just today, but in 10 years or 20 years, hence.”Turnbull reverted to the topic as he was embarking on the visit to the US last week. In remarks to Sky News, Turnbull said:

  • A threat, technically, is a combination of capability and intent. China has enormous capability of course, it’s growing as the country becomes more prosperous and economically stronger. But we do not see any hostile intent from China.
  • We don’t see the region through what is frankly an out-of-date Cold War prism. Neither, by the way, does Donald Trump. President Trump has a long experience in this part of the world as a businessman. He understands the significance, the economic significance of China’s rise and its opportunity.

Indeed, the joint statement issued after Turnbull’s meeting with Trump in the White House contains no reference to China or the disputes in the South China Sea. (Nor on ‘Quad’!) It doesn’t mention ‘freedom of navigation’, either. At the joint press conference with Turnbull, Trump said he’d “love” to have Australia back the US effort to assert the right to maritime freedom in South China Sea – “We’d love to have Australia involved and I think Australia wants us to stay involved.”

But Turnbull was unmoved. He made no commitments about Australia joining the US naval display. On the other hand, he emphasized the economic opportunities from China’s rise. Turnbull had hopes of persuading Trump to take a fresh look at the Trans-Pacific Partnership agreement, but Trump repeated his distaste of the trade pact. Trump said, “The TPP was a very bad deal for the United States, it would have cost us a tremendous amount of jobs, it would have been bad.”

Equally, in the run-up to Turnbull’s visit, there was speculation that a possible economic front comprising the US, Japan, India and Australia could be in the making to “answer Chinese and Russian infrastructure-building efforts” in the Asia-Pacific. But it turned out to be mere drum-beating. (Reuters / Bloomberg) The Trump administration is focused single-mindedly on America First and has no interest in doing the diplomatic heavy lifting to push back at China’s Belt and Road Initiative.

Clearly, one substantive outcome of Turnbull’s visit has been in the launch of an Australia-US Strategic Partnership on Energy in the Indo-Pacific. This must be seen against the backdrop of the US gearing up to export LNG to the Asian market, especially China. While on the one hand runaway gas demand in China is transforming the outlook for LNG in Asia and could see a return to the seller’s market in 2018, on the other hand, Australia’s rapidly growing LNG exports are already finding a ready market. A joint press release in Washington spelt out the “core principles” and outlined a “work plan” for the proposed US-Australia energy partnership. (here)

China would be quietly pleased with the outcome of the Trump-Turnbull meeting in Washington. An editorial in the government newspaper China Daily noted, “if Turnbull is now choosing to look at China through a more objective prism that would obviously help build more trust between the two countries, which will only usher in a more cordial atmosphere for relations to deepen and grow. Yet the Australian government still needs to match words with deeds… In its most recent foreign policy white paper, Australia proposes that it can act as an honest broker between China and the US.”

The Global Times in an editorial, also commended that Turnbull’s remarks “show positive signs for the Sino-Australian relationship.”

February 27, 2018 Posted by | Economics, Militarism | , , , | 5 Comments