US decline is China’s opportunity

By S.P.SETH

While terrorism continues to hog the limelight as an international issue, there is much more happening in the world that is not receiving due attention. One is the progressive decline of the US’ power in global affairs. Indeed, there is a correlation between the two. The 9/11 tragedy in 2001 was also the beginning of the US war on terrorism, leading to its invasion of Afghanistan.

As if Afghanistan was not enough, the United States opened another front in Iraq in 2003 to rid it of Saddam Hussein, and foster democracy in that country. Indeed, the “shock and awe” military campaign announced the practical workings of President Bush’s pre-emptive war strategy, with Iraq as a demonstration model of what might be in store for other regimes in the Middle East (like Iran, Syria and others) if they stood in the way of the US “vision” of the world. But, as we know, things didn’t work out quite like that and the US is seeking to extricate itself from these disasters.

The new Bush administration, at the turn of the new century, was keen to remake much of the world to suit its strategic priorities. There was a sense that the previous Clinton administration had squandered US power and opportunities to remake the world. The leading figures of the Bush administration already had a blueprint ready to make up for the lost time under Clinton. This was an administration in a hurry and convinced that the US should behave and act like the sovereign of the world. Because, in the ultimate analysis, what was good for America was good for the world.

The 9/11 tragedy, horrible as it was, simply spurred the new Bush administration to fix up the world. Their invasion of Afghanistan, against the backdrop of 9/11 and the Taliban and al-Qaeda link, seemed understandable to many countries. And the follow up in Iraq was an opportunity to solve the US’ Middle Eastern headaches by making an example of Iraq.

But its long involvement in these two wars, particularly in Afghanistan, with no satisfactory conclusion in sight, has damaged its global image as well as the reality of its power. It has overstretched its resources, both militarily and economically. That a superpower, with all its military muscle, has failed to produce a successful outcome against the Taliban insurgents in Afghanistan is an invitation to all the ragtag irregular militias anywhere in the world to pinprick the US and its allies.

The Somali insurgents of al-Shabab are an example in point. They recently struck in Uganda killing 75 people watching a World Cup Soccer match. The al-Shabab sees Uganda as a US proxy in Somalia. And by killing Ugandans they were in a way challenging the US power. The US, at times, appears like a giant groaning under its own weight and unable to turn around to reposition itself to its changing situation.

At the economic level, the war has seriously drained the US treasury. The cost of these two wars varies from $1 trillion to 3 trillion. The latter estimate tends to include all the societal, medical and related expenses resulting from the war operations.

Aside from the two wars, the Bush administration’s free market fundamentalism has also contributed to the US decline. For instance, it has brought the US economy to its lowest point since the 1930s depression. And infected most Western economies that bought into subprime US housing loan packages of dubious value. The merry-go round of almost limitless cheap credit seemed to have created the illusion of a new economy where all the assets (secured or unsecured) seemed to have only an upward trajectory.

And when the bubble burst, as it was bound to at some point, the American economy (and other Western economies) found themselves without any shock absorbers. With no rational solutions in sight, they all took recourse to huge borrowings to stimulate their downbeat economies to prevent a precipitous fall in unemployment, to revive failing and failed banks and so on. By socializing private losses of banks, financial institutions and insurance companies, the crisis is now assuming the form of sovereign debts. Greece is the leading example of this, with others to follow.

The United States is struggling with all these economic issues, while still mired in Afghanistan and, in a limited way, in Iraq. How this will all end is anybody’s guess! But it certainly has created an image of an America that is struggling to find its feet, while still acting as the global sheriff.

CHINA’S RISE

While the US has been busy in Afghanistan and Iraq, and the war against terrorism in general, China has steadily built up its image as an emerging superpower. In a sense, terrorism created a shared concern between the two countries with China eager to brand the Uighur separatists in Xinjiang as terrorists. It won an important concession from the US on this by labeling the East Turkistan movement as a terrorist organization.

The Uighur separatism, alongside Tibet, were major issues of human rights violations that the US had often raised with China to its discomfiture, and as an exercise (Beijing believed) in encouraging separatism in China. After the US declared war on terrorism, it softened on the human rights question in China, as well as on trade and political issues.

The trade between the two countries expanded, and the general tone of exchanges between them was marked by cordiality. China appeared to have gained certain respectability, buttressed further by its rapid rate of economic growth of about 10 per cent annually. China was becoming the factory of the world, with its exports of manufactured goods rising and creating sizeable trade surpluses in its favor. For instance, China’s trade surplus with the US is reportedly at about $200 billion a year, and another $100 billion with the rest of the world. It has amassed around $2.5 trillion of foreign currency reserves and rising.

Although China was hit by the global financial crisis with a significant fall in its exports, the situation has largely been retrieved. Even though Western economies are in bad shape, they have no real options except to buy cheap goods from China. Therefore, the US and European countries have been pressing China to revalue its currency to (1) regain the competiveness of their manufactures and (2) to reduce their respective trade deficits with China.

China has lately responded with some small appreciation of its currency but, unless the Chinese currency appreciates significantly, it will not make any dent in China’s trade surpluses with much of the world. And there is no sign that China will significantly appreciate its currency to the satisfaction of the US and its other Western trading partners.

However, China wants to reduce its dependence on exports and has taken some steps to stimulate its domestic economy. But there are dangers that this could create inflationary pressures. This has been evident in the real estate market where prices have simply ballooned to make it unaffordable for most Chinese people except the very rich.

As part of its large stimulation package, the government had leaned on banks to lend indiscriminately, resulting in upward pressure on real estate and stock markets. This has created serious economic distortions. In the industrial and construction sectors (like steel industry, infrastructure development, spending by local and regional governments) there has been a lot of wasteful spending and overproduction. The Chinese government is aware of some of these problems and has taken some remedial measures, like tightening the credit market.

Notwithstanding its counter-measures to rein in the economy, the hybrid nature of China’s capitalist economy and the Communist Party’s monopoly power is creating serious contradictions. It is difficult to reconcile the two irreconcilable elements. For instance, an uncomfortable nexus has developed between the Party and the new economic class spawned and controlled by the Party. Some of the major strategic industries, like power, transportation etc., are either owned or controlled by the children (dubbed ‘princelings’) of the top former and present Party leadership.

A similar picture is replicated at the lower rungs of the power structures in regions, local areas and so on. Which has led to widespread nepotism and corruption nationally causing great resentment among the people, even though dissemination of such information defaming China’s power elite is prohibited; except in cases where the defamed Party leaders have fallen foul of the dominant power group at different levels.

Which brings up the question of lack or absence of accountability, leading to the perpetuation of the same old rot for want of remedial avenues through open airing of corruption in relevant political and judicial structures.

Another serious problem arises from a relatively depressed rural sector of the economy. Indeed, the first sector to gain from a relatively open economy in China was the agricultural sector where communes and collectives were dismantled, with peasants energized to work on their farms (though, still, owned by the state) with increased production and improved earnings. However, from the nineties the emphasis shifted to industrial economy, with the rural sector providing a supportive role. In other words, the farming sector increasingly came to subsidize the urban economy.

The primary shift to industrial economy affected the rural sector in a number of ways: First, there was the relative neglect from the state, with very little new investments in the rural sector, (2) leading to depressed economic conditions with no new employment opportunities, (3) the influx into urban areas of rural migrant labor with no legal status and hence denied whatever state benefits accruing to those with legal urban residency, (4) cheap migrant labor, with staggered and delayed wages, and (5) the perpetuation of urban tales of rising crimes attributed to the new rural work force.

China is believed to have a floating rural migrant workforce of anywhere between 120 to 150 million and always on the move. Worst still, because of the needs of urban construction of housing and industrial plants, more and more rural land has been acquired legally (with grossly insufficient compensation) or illegally depriving its occupants of their living and occupations. In other words, there is a wide chasm between rural and urban China in terms of incomes and socially, creating a lot of resentment and protests in different parts of China. There are reportedly more than 100,000 cases of protests and demonstrations in China annually.

Out of China’s total population of 1.3 billion, its rural proportion is estimated at around 800 million. And these are the people who have either missed out or only partly gained from China’s industrial transformation, and are not terribly happy about the glaring inequalities and inequities of new China.

While China has opened up economically and socially in so many ways, its political system remains tightly controlled. The Party has largely co-opted the urban middle class into the glitter of moneymaking and upward mobility, thereby neutralizing its political aspirations and thus leaving the Party to exercise its political monopoly.

But the gap between the middle and rich classes (with Party connections) is growing fast, creating widespread resentment. And almost all Chinese people hate the systemic and ever-growing corruption involving the Party bureaucracy and political elites. Since China’s political system is largely closed, people do not have valid and legal channels of letting off steam. There is, therefore, always the danger of a spontaneous combustion of popular anger at some point in time.

However, as things stand today, China is increasingly emerging as a new superpower, though the United States still remains the world’s most powerful military power, with the world’s largest economy. The US economy, though, is plagued with all sorts of problems, with China emerging as a major creditor by investing close to 1 trillion in US securities. Indeed, China is emerging as a creditor to a number of countries, including some European countries. It has recently entered into a number of deals with Greece to invest in different sectors of its economy, thus propping up its hopeless economic situation. Greece is likely to be the stepping-stone for similar deals with other European countries in difficult economic situation.

China is investing and making deals all over the world (Africa, Middle East, Asia, Latin America) to secure the supply of oil, gas, metals and other resources to keep up the momentum of its growing economy. These deals sometimes reek of a neo-colonial pattern. For instance, these countries will not receive any share of profits until all the Chinese loans have been paid off with newly discovered resources. At the same time, China is developing new markets in these countries for its manufactures, with damaging effects on local industry.

Such dependent relationships, where even labor is exported from China to work on Chinese-funded projects, is already creating resentment in some countries. But China has the ready money, and is not concerned about the nature of the political regimes it is cultivating. Which gives Beijing an edge over the US and other Western countries, enabling it to expand its economic presence and political influence at the expense of the United States and Western Europe.

China’s imperial rise

By S.P.SETH

It rightly made news when China suddenly emerged as Greece’s economic savior of sorts. It happened around the time when credit ratings agency, Moody’s, had downgraded the country’s rating to junk level. Which means that investing in Greece or lending it money was a high-risk proposition.

Even though the European Union and IMF had thrown it a credit line to bolster up its credit worthiness, the markets weren’t convinced.

In Germany, the European Union’s biggest economy, the move to bail out Greece wasn’t popular at all. Greece was not only facing economic ruin but also political and social instability.

The austerity regime imposed on Greece by the European Union and IMF was creating turbulence. And the Greece’s socialist government was (and still is) at wit’s end.

It was against this backdrop that China entered into a series of bilateral agreements with Greece to further broaden China’s economic horizon that, in turn, will help Greece at a very difficult time.

It must be noted that China is not doing these economic deals out of the goodness of its heart. These deals make important political and economic sense. The Chinese vice premier, Zhang Dejiang, made two visits to Athens during a one month period to make deals worth billions of dollars in shipping, tourism, telecommunications and more.

It is reported that the 14 deals with Greece amounted to the biggest single investment by China in Europe, though no figure has been put on it.

As for Greece, it bolsters its economic situation at a critical time. By investing in Greece in such a public and dramatic way, China has expressed its confidence in Athens’ capacity to successfully deal with its debt situation.

Zhang Dejiang said, “ I am convinced that Greece can overcome its current economic difficulties.” And such a vote of confidence was very sorely needed by Greece in its current economic travails.

Of course, it will provide China a useful conduit to expand its economic and political tentacles into other countries in the European Union, especially Portugal, Spain, Ireland, and the Balkan region.

Even the United Kingdom is not looking good, with its budget deficit at around 11 percent of GDP, close to that of Greece. Its total debt is believed to be the second biggest in the European Union after Ireland.

Though China’s economy is not in sterling shape, it does have large foreign currency reserves from its trade surpluses, particularly with the United States. It is estimated to have over $2 trillion worth of foreign currency reserves, and rising.

Its annual trade surplus with the United States is rising at over $200 billion a year, and another $100 billion with rest of the world. Which means that its reserves are growing at the rate of over $300 billion a year.

China, therefore, can play politics with its money to expand its political and economic reach into Europe.

Although China has large foreign exchange reserves, it still has a fairly serious problem of indebtedness. China’s official figure of its debt at 20 per cent of GDP is simply, like its other statistics, not believable. Victor Shih of Northwestern University in Illinois, reportedly puts it at about 96 per cent of China’s GDP by next year—to include the debts of local instrumentalities and state-funded debts.

But, like in Japan, China’s debt is mostly internally funded, with low interest-bearing savings of its hard working and thrifty people. It is still debt, though. If there were to be a loss of faith in the government, this could lead to a run on government banks and other related agencies.

Be that as it may, China’s large foreign exchange reserves are an important part of its wide reach. And unless the European Union puts its house in order, China will have ample opportunities to use its financial power to create serious mischief.

For instance, in many African countries, China is already virtually pillaging their resources’ through investment in mining, oil, gas and other extractive industries. In return, these countries pledge their commodities to China over many years to pay for the Chinese debt.

In other words, these African countries will remain poor and destitute for many years to come even after their mines and oil fields become operational and profitable.

This was once called colonialism, and still is even if the perpetrator, China, once suffered and railed against such inequities.

Europe might not suffer in the same way as China’s African targets. But exchanging one kind of debt with another (even if it is called investment) from China doesn’t alter the fact that such relationships entrench economic dependency and hence exploitation.

With its long historical memories of how China was done in by the colonial powers in the past, it might not be averse to doing the same to European countries.

Europe apart, China is everywhere in the United States’ backyard of Latin America. For instance, China is now Brazil’s biggest trading partner, having supplanted the United States. Its trade with Brazil has reportedly risen from $10 billion a year in 2000 to over 100 billion today.

Like in Africa, Latin American exports to China are commodities and minerals. And they are increasingly becoming an important source of their revenues. With such growing economic dependence on China, these countries are losing the ability to develop an equitable relationship.

And China is exploiting its economic power to push exports of manufactured goods into these countries, with its artificially depressed wages aided by its undervalued currency.

In the circumstances, these countries will have no prospect of developing a manufacturing base. And where it does exist in a small way, that too will be destroyed in the face of China’s onslaught.

China is developing into a neocolonial power. And its entrenchment in the US’ backyard has all sorts of pitfalls for the United States and the region.

Sometimes, it would seem that China is seeking to contain or encircle the United States. The only thing missing is that it doesn’t yet have the military power to enforce its writ.

But they are working on it, conscious that China will need a much bigger military machine to enforce compliance on their economic dependencies.

But there are two important constraints here. First: they have too many internal problems to reckon with. Therefore, a large and disproportionate diversion of national resources to the PLA might further upset the internal imbalance.

As it is, China’s spending on health, education and social welfare are hopelessly inadequate.

Second: by elevating the armed forces to a higher level of guarding and expanding China’s imperial interests, the PLA might become a threat to the Party’s political supremacy.

Therefore, there are inbuilt internal constraints on China’s emerging imperial overstretch. At the same time, the promotion of national chauvinism would appear to be a calculated move by the Party to underpin its legitimacy.

US dependence on China shortsighted

By S.P.SETH

North Korea continues to defy the world on almost everything. The latest was the sinking of a South Korean navy ship with a North Korean torpedo, killing 46 crews. Pyongyang denies the accusation, even though it has been investigated and confirmed by an international enquiry.

Even if one were to give some credence to Pyongyang’s denial, its history of killing its South Korean targets at different times in the past would suggest that the sinking of the South Korean ship is in character with the regime’s propensity to commit murders and create mayhem.

However, all the brouhaha created by this serious act of criminality seems to have died down. After making a big show of protests, and follow up action (with the support of the United States), Seoul too has gone relatively quiet.

There are two reasons for this. First, China has put a damper on getting involved in a punitive action against Pyongyang. Both the United States and South Korea were hopeful, that faced with the evidence of North Korean involvement, Beijing might line up with the rest of the world to take action against the Kim Jong-il’s notorious regime.

Therefore, they put much store by Chinese Premier Wen Jiabao’s recent visit to Seoul to examine the issue. But after a flurry of meetings in South Korea, Premier Wen wasn’t keen on blaming the North. He instead favored a policy of restraint to calm the situation.

In other words, China seemed to put both sides of the Korean peninsula on an equal footing in relation to the crisis. Apparently, China’s reluctance to buy into the inter-Korean crisis had a dampening effect on both South Korea and its ally-the United States.

Premier Wen’s South Korea trip has emphasized China’ special security interests in the Korean peninsula. It had apparently heard the North Korean version from the Dear Leader when Kim Jong-il visited China last month in a special train and was warmly welcomed by its top leadership. Therefore, it shouldn’t be surprising that Wen refused to take sides.

The United States might find comfort in the critical observations of some Chinese academics bemoaning that North Korea has high-jacked China’s foreign policy in the Korean peninsula. But, they argue, that this cannot be sustained and, sooner or later, China would have had enough of it. It might be part of the good cop and bad cop routine because nothing about China is all that simple.

Another reason for the calming of the rhetoric in the Korean situation is that the South Korea’s ruling part has suffered a drubbing in the country’s local and regional elections.

Seoul made a lot of noise (even cancelling the few economic ties it has had with the other side) over the question of its ship’s sinking. They believed that a South Korean government standing up to North Korea’s bullying would be a popular move.

After all, the present conservative government came to power promising a hard line. But it would appear that its strong rhetoric hasn’t gone well with many of its people. And the government has lowered the decibel level.

And where China is concerned, North Korea seems to get away with even the murder of Chinese citizens across their border in Liaoning province. According to a spokesman for the Chinese Ministry of Foreign Affairs, “On the morning of June 4, some residents of Dandong, in Liaoning province, were shot by a DPRK border guard on suspicion of crossing the border for trade activities, leaving three dead and one injured.”

China’s response was quite passive, simply raising “a solemn representation with the DPRK” and awaiting investigation. It will obviously be sorted out in a low-key fashion.

Whichever one looks, China’s role in the Korean peninsula is considered critical but Beijing is not inclined to effectively put pressure on North Korea. And without that there cannot be any forward movement, be it the issue of the sinking of the South Korean ship and, more importantly still, its nuclear program.

At one point, when North Korea was saber-rattling with its atomic tests Beijing seemed quite worried, and took a common stand in the UN Security Council to slap sanctions on North Korea. But it was weak on implementing the sanctions, thus continuing to provide lifeline for North’s regime.

China apparently has come to the conclusion that if it went all the way in denying North Korea its essential supplies, the regime would collapse and with it the country itself. Which would flood China with a horde of refugees creating all sorts of unpredictable problems.

Since then, the internal situation in North Korea has only got worse. The Dear Leader Kim Jong-il’s health seems to have further deteriorated, which the Chinese must have had time to assess during his recent trip to Beijing.

The succession issue, with his youngest son supposedly the favored one to take over, doesn’t appear to have been sorted out. The country is in a prolonged state of food scarcity with widespread hunger. Even though hope and morale are very low, there are no signs of rebellion of any sort.

With the government exercising total control, it is not surprising that people are afraid to challenge the regime. However, all the signs of a collapse from within are there.

But China’s economic and political support is delaying the inevitable day. China is, of course, worried about the influx of refugees if North Korea were to collapse. But that is going to happen any way sooner or later.

If such a reading of the situation were correct, it would be in China’s interest to work out with the United States and other countries a comprehensive refugee policy to share the burden.

But China obviously is not keen on a regional or global approach, because it regards Korean peninsula as its own strategic patch. It doesn’t want to involve other countries to further muddy the situation; when the US already has troops’ presence as well as military alliance with South Korea.

Despite this, the United States is depending more and more on China, believing that the US and China have shared non-proliferation objectives. That may well be true in a limited sense but China sees it in a larger context.

The US doesn’t share a border with North Korea. A murky and dangerous situation arising from an unstable North Korea might trigger a US military response on behalf of its South Korean ally from a perceived or actual attack from Pyongyang.

Therefore, for the US to imagine a shared or common strategic objective between itself and China in regard to North Korea is shortsighted. For China, geopolitically, Korean peninsula is its backyard.

For the US, on the other hand, North Korea (like Iran), is part of its global policy to stop nuclear proliferation, as well as to support South Korea against a potential or real military attack from the North.

While it makes sense to have China on its side to stop North Korea’s nuclear proliferation, it doesn’t make sense, though, to depend largely on China to promote US strategic goals.

US dependence on China shortsighted

By S.P.SETH

North Korea continues to defy the world on almost everything. The latest was the sinking of a South Korean navy ship with a North Korean torpedo, killing 46 crews. Pyongyang denies the accusation, even though it has been investigated and confirmed by an international enquiry.

Even if one were to give some credence to Pyongyang’s denial, its history of killing its South Korean targets at different times in the past would suggest that the sinking of the South Korean ship is in character with the regime’s propensity to commit murders and create mayhem.

However, all the brouhaha created by this serious act of criminality seems to have died down. After making a big show of protests, and follow up action (with the support of the United States), Seoul too has gone relatively quiet.

There are two reasons for this. First, China has put a damper on getting involved in a punitive action against Pyongyang. Both the United States and South Korea were hopeful, that faced with the evidence of North Korean involvement, Beijing might line up with the rest of the world to take action against the Kim Jong-il’s notorious regime.

Therefore, they put much store by Chinese Premier Wen Jiabao’s recent visit to Seoul to examine the issue. But after a flurry of meetings in South Korea, Premier Wen wasn’t keen on blaming the North. He instead favored a policy of restraint to calm the situation.

In other words, China seemed to put both sides of the Korean peninsula on an equal footing in relation to the crisis. Apparently, China’s reluctance to buy into the inter-Korean crisis had a dampening effect on both South Korea and its ally-the United States.

Premier Wen’s South Korea trip has emphasized China’ special security interests in the Korean peninsula. It had apparently heard the North Korean version from the Dear Leader when Kim Jong-il visited China last month in a special train and was warmly welcomed by its top leadership. Therefore, it shouldn’t be surprising that Wen refused to take sides.

The United States might find comfort in the critical observations of some Chinese academics bemoaning that North Korea has high-jacked China’s foreign policy in the Korean peninsula. But, they argue, that this cannot be sustained and, sooner or later, China would have had enough of it. It might be part of the good cop and bad cop routine because nothing about China is all that simple.

Another reason for the calming of the rhetoric in the Korean situation is that the South Korea’s ruling part has suffered a drubbing in the country’s local and regional elections.

Seoul made a lot of noise (even cancelling the few economic ties it has had with the other side) over the question of its ship’s sinking. They believed that a South Korean government standing up to North Korea’s bullying would be a popular move.

After all, the present conservative government came to power promising a hard line. But it would appear that its strong rhetoric hasn’t gone well with many of its people. And the government has lowered the decibel level.

And where China is concerned, North Korea seems to get away with even the murder of Chinese citizens across their border in Liaoning province. According to a spokesman for the Chinese Ministry of Foreign Affairs, “On the morning of June 4, some residents of Dandong, in Liaoning province, were shot by a DPRK border guard on suspicion of crossing the border for trade activities, leaving three dead and one injured.”

China’s response was quite passive, simply raising “a solemn representation with the DPRK” and awaiting investigation. It will obviously be sorted out in a low-key fashion.

Whichever one looks, China’s role in the Korean peninsula is considered critical but Beijing is not inclined to effectively put pressure on North Korea. And without that there cannot be any forward movement, be it the issue of the sinking of the South Korean ship and, more importantly still, its nuclear program.

At one point, when North Korea was saber-rattling with its atomic tests Beijing seemed quite worried, and took a common stand in the UN Security Council to slap sanctions on North Korea. But it was weak on implementing the sanctions, thus continuing to provide lifeline for North’s regime.

China apparently has come to the conclusion that if it went all the way in denying North Korea its essential supplies, the regime would collapse and with it the country itself. Which would flood China with a horde of refugees creating all sorts of unpredictable problems.

Since then, the internal situation in North Korea has only got worse. The Dear Leader Kim Jong-il’s health seems to have further deteriorated, which the Chinese must have had time to assess during his recent trip to Beijing.

The succession issue, with his youngest son supposedly the favored one to take over, doesn’t appear to have been sorted out. The country is in a prolonged state of food scarcity with widespread hunger. Even though hope and morale are very low, there are no signs of rebellion of any sort.

With the government exercising total control, it is not surprising that people are afraid to challenge the regime. However, all the signs of a collapse from within are there.

But China’s economic and political support is delaying the inevitable day. China is, of course, worried about the influx of refugees if North Korea were to collapse. But that is going to happen any way sooner or later.

If such a reading of the situation were correct, it would be in China’s interest to work out with the United States and other countries a comprehensive refugee policy to share the burden.

But China obviously is not keen on a regional or global approach, because it regards Korean peninsula as its own strategic patch. It doesn’t want to involve other countries to further muddy the situation; when the US already has troops’ presence as well as military alliance with South Korea.

Despite this, the United States is depending more and more on China, believing that the US and China have shared non-proliferation objectives. That may well be true in a limited sense but China sees it in a larger context.

The US doesn’t share a border with North Korea. A murky and dangerous situation arising from an unstable North Korea might trigger a US military response on behalf of its South Korean ally from a perceived or actual attack from Pyongyang.

Therefore, for the US to imagine a shared or common strategic objective between itself and China in regard to North Korea is shortsighted. For China, geopolitically, Korean peninsula is its backyard.

For the US, on the other hand, North Korea (like Iran), is part of its global policy to stop nuclear proliferation, as well as to support South Korea against a potential or real military attack from the North.

While it makes sense to have China on its side to stop North Korea’s nuclear proliferation, it doesn’t make sense, though, to depend largely on China to promote US strategic goals.

Hu Jintao’s “harmonious society” is a cruel joke

By S.P.SETH

The recent spate of killings in China, mostly of young children, raises several questions.
The frequency of it---eight assaults in 10 weeks---cannot just be explained away as the work of mentally deranged killers or copycat incidents, though some of them might be.
The Chinese authorities have sought to limit media coverage on the ground that it simply encourages copycat killings. While one sympathizes with China’s ordeal in the wake of such horrible killings---the latest involving the use of a kitchen cleaver to kill seven children and two adults at a kindergarten--- limiting or censoring its exposure by the media is hardly the right approach.
It is only through media exposure and open investigation that a clear picture of such human tragedy is likely to emerge. And on this will depend the desired course of action to deal with such incidents.
But, as with any other disaster, the first response of the Chinese authorities is to clamp down on public information.
Even in the absence any substantive information about the killing of children, there are some plausible explanations.
It so happens that when some people start acting out their murderous impulses to wreak vengeance on society, particularly children, it is most likely that their dramatic action is intended to invite attention in the absence of legitimate avenues to be heard.
They might nurse terrible agony that has remained bottled up, needing psychological counseling/treatment, as well as social interaction.
According to a study conducted last year by Dr. Michael Phillips, a mental health expert at Tongji University, Shanghai, 173 million Chinese suffered from mental problems ranging from schizophrenia to alcohol abuse. Of these, 91 per cent had never been treated.
China’s rapid economic growth, and consequent social disruption, has created a serious disconnect between its rulers and the people.
True, China’s ruling oligarchy has created a new social base in urban middle class. But they too, like most other people, feel frustrated with the growing income gap between them and the rich business class.
Not only this. The new business class and the Party apparatchik work in cahoots; with the princelings of the top Party leadership at the top of the pyramid. Therefore, wherever one looks, corruption and nepotism are the order of the day.
In the midst of such venality, China’s rulers have the gumption to talk about creating a “harmonious society”. And to rally people around the flag by staging national extravaganzas like the Beijing Olympics and the Shanghai World Expo jamborees.
At the same time when horrible killings of school children occur, Premier Wen Jiabao has platitudes aplenty to offer. Reacting to the killings, he reportedly said that besides taking “…vigorous safety measures, we also have to pay attention to addressing some deep-seated causes behind these problems, including dealing with some social conflicts and resolving disputes.”
And what has he in mind precisely? Not much except to urge that, “We must strengthen the role of mediation at the grassroots…” Which means nothing in real terms.
As Prime Minister presiding over the rising social contradictions and cleavages in his country, there should be a well thought out plan to deal with and resolve these issues that threaten the country’s social stability.
Of course, any well-thought out plan will require open debate and investigation into the “deep-seated causes behind these problems.”
But this is not what the government would want. They had squelched the persistent demands by the parents of the children buried alive under shoddy school buildings during 2008 Szechuan earthquake, as well as brushing aside the scandal about the poisoning of children with milk mixed with chemical melamine.
The first response to all these and other tragedies is to manage and censor the media as is being done with schoolyard killings.
In a recent media exposure of children’s deaths and illnesses from the use of unrefrigerated vaccines, the authorities removed Bao Yueyang, editor of the China Economic Times, which carried out the investigation.
The second method is to buy out the victims’ silence with money. And if that doesn’t work to threaten them with physical harm.
And in most cases it works when victims are arrayed against state authorities without any other recourse for redress to their grievances.
The third method is to frame them in some fake criminal case and throw them into jail. A variant of this is to throw some of them into mental institutions.
However, if some victims still persist in taking their cases to Beijing, they are waylaid on the way and thrown into “black jails”--dungeons operated by gangsters hired by local and regional authorities.
In other words, there are no legitimate avenues for Chinese citizens to seek justice.
The media are managed, manipulated and censored; courts work under state direction and politics of the country is the monopoly of the Party.
No wonder, there is so much repressed anger in the society, that tends to find outlet through outbursts like schoolyard killings.
The pursuit of greed at any cost has cost the country its anchors in community life and traditional beliefs as social props. China is increasingly becoming a dog-eat-dog society.
In the light of all this, Hu Jintao’s talk of bringing about a “harmonious society” is not only a contradiction in terms but also a cruel joke. China needs to ease up and open up.
And some of the Chinese academics are coming to this conclusion. Since they manage to say certain things without threatening the one-party system, they serve a useful role.
For instance, the Southern Weekend newspaper recently published extracts from a report by a group of sociologists, led by Professor Sun Liping of Tsinghua University.
The report, quoted in the press, said: “Without fundamental resolution of the question of mechanisms for social justice and balancing interests, blindly preventing the expression of legitimate interests in the name of stability will only accumulate contradictions and render society even more unstable.”
Still another academic, Professor Yu Jianrong at the Chinese Academy of Social Sciences has argued for opening up the system for people’s participation. He warns that if this is not done, “Great social upheaval may thus occur, and the existing social and political orders are likely to be destroyed.”
But China’s ruling party is drunk with power, and in no mood to listen.

Need for balance in projecting China’s rise

By S.P.SETH

The symbolism of China’s growing power is dramatized in the French President Nicolas Sarkozy‘s recent China visit as an exercise in smoothing relations with that country.

Their relations reached a crisis point in 2008 over a series of events such as protests in Paris over Chinese Olympic torch relays, criticism of China’s human rights in Tibet and, above all, President Sarkozy’s meeting with the visiting Dalai Lama.

Beijing reacted strongly by downgrading economic and political relations with France.

Beijing was apparently telling France and the world that any country officially hosting the Dalai Lama would have to be prepared to stand up to China or else face political and economic sanctions.

Taiwan is the only country that recently managed to squeeze in the Dalai Lama’s visit when it was hit by a typhoon. He had been invited to offer spiritual solace, sought by the affected people and their political leaders who, incidentally, largely belonged to the opposition Democratic Progressive Party.

Understandably, China didn’t want to give President Ma Ying-jeou’s opponents more political fuel to damage the ruling Kuomintang party. President Ma is their best political bet in Taiwan’s competitive political landscape.

But coming back to the French President Sarkozy’s China visit, undoubtedly it is an important symbol of China’s Middle Kingdom syndrome, and an effective exercise of Beijing’s coercive diplomacy.

However, It doesn’t square with the reality of Chinese power and prosperity. In terms of raw military power, the United States still remains the most powerful country in the world.

As for economic prosperity, in per capita terms its people are way behind the West, and Japan, and likely to take a long time to reach there, if ever.

But its spectacular economic growth from a very low base, and the vastness of China, has created the perception of a new superpower likely to overtake the United States in the next two to three decades.

More and more experts and policy makers are coming to this view. Which has led them to argue in favor of accommodating and integrating China increasingly into the framework of the existing international institutions, largely shaped by the United States and Western countries in the post World War 11 period.

This way, it is believed, that the transition to a new world order, with China as its crucial component, might be achieved peacefully.

According to China scholar Marc Lanteigne, “What separates China from other states, and indeed previous global powers [like Germany and Japan], is that not only is it ‘growing up’ within the milieu of international institutions far more developed than ever before, but more importantly, it is doing so while making active use of these institutions to promote the country’s development of global power status.”

It is true China has made best use of the existing international institutions to exponentially increase exports (though the global economic crisis has limited that prospect), amass trade surpluses of $2.4 trillion (and rising) and significantly increase its international profile.

But, at the same time, it is also true that, when constrained in its role as an emerging global power, it doesn’t feel the need to abide by some accepted international norms. Which is frustrating for international community.

Prime Minister Kevin Rudd of Australia best expressed this frustration in a recent speech at the Australian National University (ANU).

He reportedly said, “It doesn’t help, for example, that China associates with regimes around the world that others seek to isolate because of their assault on the integrity of international system—from Sudan to Burma.”

He went on, “China can—and should—do more to support international efforts against destabilizing regimes and on global security challenges such as Afghanistan and Iran”, as well as North Korea.

Beijing is prepared to operate within the multilateral framework of international institutions as long as it suits China.

At the same time it likes the operational flexibility to promote its interests as a competitive centre of power, if not the only centre of power.

Indeed, in recent history, no country with global aspirations has been satisfied with a role within an existing global system. The examples of Germany and Japan are illustrative.

China is already engaged in a wild grab for resources anywhere and everywhere in the world.

And as John Mearsheimer, an American scholar of realpolitik, has written, “If China continues its impressive economic growth over the next few decades, the United States and China are likely to engage in an intense security competition with considerable potential for war.”

The first part of China’s story is its spectacular economic growth to eventually become a centre of power.

But there is an important caveat here, which is generally ignored in this big picture.

The caveat is whether a one-party state of China’s size will be able to maintain its monopoly power over a period of time.

We are already seeing signs of widespread social unrest in various forms and in different places, and its suppression with brute state power.

According to Bao Tong, a famous dissident, “Every four minutes there is a protest of more than 100 people” In China. In other words, so many “little Tiananmen” are happening everyday, so says Bao.

But these lack organization. The Party’s greatest fear is that human rights activists and intellectuals might fill the organizational gap at some point when social discontent reaches a critical point.

Hence, there is a systematic suppression of such elements.

But for how long?

There are so many issues agitating the people, from widespread corruption, nepotism, land grab, use of gangsters, particularly by the local and regional authorities, to silence its critics, police brutality, and the list goes on.

To take one example: China’s showcase World Expo in Shanghai reportedly involved clearing 2.6 square kilometers along the Huangpu River.

Which meant moving 18,000 families and 270 factories, including the Jiang Nan Shipyard, which employs 10,000 workers.

Only an authoritarian regime of China’s ilk can spend $45 billion or more for such an event, causing so much distress and suffering to its own people removing them from settled lives and livelihood.

There are so many big and small examples of such scant regard for people, when the government is bent on having its way.

What it means is that anyone making a projection of China’s future and its international status must take into account the fragility of the country’s internal situation.

It is a one-party band with no legitimate channels for people to express their frustration and anger and to seek justice.

In such a situation with anger and frustration constantly building up, and with no safety valve by way of popular forums and institutions to channel people’s wrath, there is every danger of a blow up at some point.

The symbolism of China’s growing power is dramatized in the French President Nicolas Sarkozy‘s recent China visit as an exercise in smoothing relations with that country.

Their relations reached a crisis point in 2008 over a series of events such as protests in Paris over Chinese Olympic torch relays, criticism of China’s human rights in Tibet and, above all, President Sarkozy’s meeting with the visiting Dalai Lama.

Beijing reacted strongly by downgrading economic and political relations with France.

Beijing was apparently telling France and the world that any country officially hosting the Dalai Lama would have to be prepared to stand up to China or else face political and economic sanctions.

Taiwan is the only country that recently managed to squeeze in the Dalai Lama’s visit when it was hit by a typhoon. He had been invited to offer spiritual solace, sought by the affected people and their political leaders who, incidentally, largely belonged to the opposition Democratic Progressive Party.

Understandably, China didn’t want to give President Ma Ying-jeou’s opponents more political fuel to damage the ruling Kuomintang party. President Ma is their best political bet in Taiwan’s competitive political landscape.

But coming back to the French President Sarkozy’s China visit, undoubtedly it is an important symbol of China’s Middle Kingdom syndrome, and an effective exercise of Beijing’s coercive diplomacy.

However, It doesn’t square with the reality of Chinese power and prosperity. In terms of raw military power, the United States still remains the most powerful country in the world.

As for economic prosperity, in per capita terms its people are way behind the West, and Japan, and likely to take a long time to reach there, if ever.

But its spectacular economic growth from a very low base, and the vastness of China, has created the perception of a new superpower likely to overtake the United States in the next two to three decades.

More and more experts and policy makers are coming to this view. Which has led them to argue in favor of accommodating and integrating China increasingly into the framework of the existing international institutions, largely shaped by the United States and Western countries in the post World War 11 period.

This way, it is believed, that the transition to a new world order, with China as its crucial component, might be achieved peacefully.

According to China scholar Marc Lanteigne, “What separates China from other states, and indeed previous global powers [like Germany and Japan], is that not only is it ‘growing up’ within the milieu of international institutions far more developed than ever before, but more importantly, it is doing so while making active use of these institutions to promote the country’s development of global power status.”

It is true China has made best use of the existing international institutions to exponentially increase exports (though the global economic crisis has limited that prospect), amass trade surpluses of $2.4 trillion (and rising) and significantly increase its international profile.

But, at the same time, it is also true that, when constrained in its role as an emerging global power, it doesn’t feel the need to abide by some accepted international norms. Which is frustrating for international community.

Prime Minister Kevin Rudd of Australia best expressed this frustration in a recent speech at the Australian National University (ANU).

He reportedly said, “It doesn’t help, for example, that China associates with regimes around the world that others seek to isolate because of their assault on the integrity of international system—from Sudan to Burma.”

He went on, “China can—and should—do more to support international efforts against destabilizing regimes and on global security challenges such as Afghanistan and Iran”, as well as North Korea.

Beijing is prepared to operate within the multilateral framework of international institutions as long as it suits China.

At the same time it likes the operational flexibility to promote its interests as a competitive centre of power, if not the only centre of power.

Indeed, in recent history, no country with global aspirations has been satisfied with a role within an existing global system. The examples of Germany and Japan are illustrative.

China is already engaged in a wild grab for resources anywhere and everywhere in the world.

And as John Mearsheimer, an American scholar of realpolitik, has written, “If China continues its impressive economic growth over the next few decades, the United States and China are likely to engage in an intense security competition with considerable potential for war.”

The first part of China’s story is its spectacular economic growth to eventually become a centre of power.

But there is an important caveat here, which is generally ignored in this big picture.

The caveat is whether a one-party state of China’s size will be able to maintain its monopoly power over a period of time.

We are already seeing signs of widespread social unrest in various forms and in different places, and its suppression with brute state power.

According to Bao Tong, a famous dissident, “Every four minutes there is a protest of more than 100 people” In China. In other words, so many “little Tiananmen” are happening everyday, so says Bao.

But these lack organization. The Party’s greatest fear is that human rights activists and intellectuals might fill the organizational gap at some point when social discontent reaches a critical point.

Hence, there is a systematic suppression of such elements.

But for how long?

There are so many issues agitating the people, from widespread corruption, nepotism, land grab, use of gangsters, particularly by the local and regional authorities, to silence its critics, police brutality, and the list goes on.

To take one example: China’s showcase World Expo in Shanghai reportedly involved clearing 2.6 square kilometers along the Huangpu River.

Which meant moving 18,000 families and 270 factories, including the Jiang Nan Shipyard, which employs 10,000 workers.

Only an authoritarian regime of China’s ilk can spend $45 billion or more for such an event, causing so much distress and suffering to its own people removing them from settled lives and livelihood.

There are so many big and small examples of such scant regard for people, when the government is bent on having its way.

What it means is that anyone making a projection of China’s future and its international status must take into account the fragility of the country’s internal situation.

It is a one-party band with no legitimate channels for people to express their frustration and anger and to seek justice.

In such a situation with anger and frustration constantly building up, and with no safety valve by way of popular forums and institutions to channel people’s wrath, there is every danger of a blow up at some point.

Need for balance in projecting China’s rise

By S.P.SETH

The symbolism of China’s growing power is dramatized in the French President Nicolas Sarkozy‘s recent China visit as an exercise in smoothing relations with that country.

Their relations reached a crisis point in 2008 over a series of events such as protests in Paris over Chinese Olympic torch relays, criticism of China’s human rights in Tibet and, above all, President Sarkozy’s meeting with the visiting Dalai Lama.

Beijing reacted strongly by downgrading economic and political relations with France.

Beijing was apparently telling France and the world that any country officially hosting the Dalai Lama would have to be prepared to stand up to China or else face political and economic sanctions.

Taiwan is the only country that recently managed to squeeze in the Dalai Lama’s visit when it was hit by a typhoon. He had been invited to offer spiritual solace, sought by the affected people and their political leaders who, incidentally, largely belonged to the opposition Democratic Progressive Party.

Understandably, China didn’t want to give President Ma Ying-jeou’s opponents more political fuel to damage the ruling Kuomintang party. President Ma is their best political bet in Taiwan’s competitive political landscape.

But coming back to the French President Sarkozy’s China visit, undoubtedly it is an important symbol of China’s Middle Kingdom syndrome, and an effective exercise of Beijing’s coercive diplomacy.

However, It doesn’t square with the reality of Chinese power and prosperity. In terms of raw military power, the United States still remains the most powerful country in the world.

As for economic prosperity, in per capita terms its people are way behind the West, and Japan, and likely to take a long time to reach there, if ever.

But its spectacular economic growth from a very low base, and the vastness of China, has created the perception of a new superpower likely to overtake the United States in the next two to three decades.

More and more experts and policy makers are coming to this view. Which has led them to argue in favor of accommodating and integrating China increasingly into the framework of the existing international institutions, largely shaped by the United States and Western countries in the post World War 11 period.

This way, it is believed, that the transition to a new world order, with China as its crucial component, might be achieved peacefully.

According to China scholar Marc Lanteigne, “What separates China from other states, and indeed previous global powers [like Germany and Japan], is that not only is it ‘growing up’ within the milieu of international institutions far more developed than ever before, but more importantly, it is doing so while making active use of these institutions to promote the country’s development of global power status.”

It is true China has made best use of the existing international institutions to exponentially increase exports (though the global economic crisis has limited that prospect), amass trade surpluses of $2.4 trillion (and rising) and significantly increase its international profile.

But, at the same time, it is also true that, when constrained in its role as an emerging global power, it doesn’t feel the need to abide by some accepted international norms. Which is frustrating for international community.

Prime Minister Kevin Rudd of Australia best expressed this frustration in a recent speech at the Australian National University (ANU).

He reportedly said, “It doesn’t help, for example, that China associates with regimes around the world that others seek to isolate because of their assault on the integrity of international system—from Sudan to Burma.”

He went on, “China can—and should—do more to support international efforts against destabilizing regimes and on global security challenges such as Afghanistan and Iran”, as well as North Korea.

Beijing is prepared to operate within the multilateral framework of international institutions as long as it suits China.

At the same time it likes the operational flexibility to promote its interests as a competitive centre of power, if not the only centre of power.

Indeed, in recent history, no country with global aspirations has been satisfied with a role within an existing global system. The examples of Germany and Japan are illustrative.

China is already engaged in a wild grab for resources anywhere and everywhere in the world.

And as John Mearsheimer, an American scholar of realpolitik, has written, “If China continues its impressive economic growth over the next few decades, the United States and China are likely to engage in an intense security competition with considerable potential for war.”

The first part of China’s story is its spectacular economic growth to eventually become a centre of power.

But there is an important caveat here, which is generally ignored in this big picture.

The caveat is whether a one-party state of China’s size will be able to maintain its monopoly power over a period of time.

We are already seeing signs of widespread social unrest in various forms and in different places, and its suppression with brute state power.

According to Bao Tong, a famous dissident, “Every four minutes there is a protest of more than 100 people” In China. In other words, so many “little Tiananmen” are happening everyday, so says Bao.

But these lack organization. The Party’s greatest fear is that human rights activists and intellectuals might fill the organizational gap at some point when social discontent reaches a critical point.

Hence, there is a systematic suppression of such elements.

But for how long?

There are so many issues agitating the people, from widespread corruption, nepotism, land grab, use of gangsters, particularly by the local and regional authorities, to silence its critics, police brutality, and the list goes on.

To take one example: China’s showcase World Expo in Shanghai reportedly involved clearing 2.6 square kilometers along the Huangpu River.

Which meant moving 18,000 families and 270 factories, including the Jiang Nan Shipyard, which employs 10,000 workers.

Only an authoritarian regime of China’s ilk can spend $45 billion or more for such an event, causing so much distress and suffering to its own people removing them from settled lives and livelihood.

There are so many big and small examples of such scant regard for people, when the government is bent on having its way.

What it means is that anyone making a projection of China’s future and its international status must take into account the fragility of the country’s internal situation.

It is a one-party band with no legitimate channels for people to express their frustration and anger and to seek justice.

In such a situation with anger and frustration constantly building up, and with no safety valve by way of popular forums and institutions to channel people’s wrath, there is every danger of a blow up at some point.