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Factories shift out of China to avoid trade war, boosting volume for logistics firms like Kerry | South China Morning Post
Factories shift out of China to avoid trade war, boosting volume for logistics firms like Kerry
Kerry Logistics Network, owned by Malaysian billionaire Robert Kuok, has benefited from trade war shake-ups at Asian firms
Peggy Sito
Tuesday, 31 Jul 2018, 6:45PM
Kerry Logistics Network, a Hong Kong-listed firm owned by Robert Kuok, Malaysia’s wealthiest man, has become a beneficiary of the ongoing trade war between the world’s two largest economies, as customers shift part of their production lines from mainland China to such destinations as northern Malaysia’s Penang to skirt US tariffs.
“Our clients have been shifting part of their production lines as early as March from China to other Asian countries where they already have manufacturing plants,” said the logistics company’s managing director, William Ma Wing-kai.
The Sino-US trade war has been forcing Kerry’s clients to shift their production towards the members of the Association of Southeast Asian Nations (Asean), or to ship finished goods to the Americas to avoid the increased tariffs. Either way would increase shipping volumes, Ma said.
“This is a reallocation of global production bases,” Ma said during an interview with the South China Morning Post.
Kerry, one of Asia’s biggest shipping and logistics companies, was established in 1981 by the Kuok Group, the flagship of Kuok, who has an estimated wealth of US$14.6 billion according to Forbes magazine.
Listed in Hong Kong nearly five years ago, the company operates in 260 cities in the Asia-Pacific region and its global network covers more than 50 countries from China, Asia, Middle East to Europe.
Further Reading: Hong Kong’s industrialists are moving out of mainland China to safer havens in Sino-US trade war
The company transports cargo using air freight, ocean vessels, and cross-border road freight in Asia, and between Asia and Europe. It also offers express services in the region, taking advantage of the increasing intra-Asean e-commerce business.
The ongoing shift of production bases will lead to trade growth in Malaysia, Vietnam, Myanmar and Laos starting in the second half of this year, Ma said, a trend that will last for many years to come.
“Our business in China may be affected a bit, but business in Asia is rising,” he said.
China’s economy doing well despite threat of trade war fallout, IMF says
The company, with nearly 33,000 employees, has been extending its presence to Asia and elsewhere around the world as it sees business opportunities in the rapidly industrialising economies in the region. There is also the push factor, brought on by growing competition in China and surging operating costs in labour and land prices.
Revenue from China accounts for less than 20 per cent of total turnover, with the rest coming from Hong Kong, Taiwan and Thailand. Business from Asia will double to 50 per cent of total revenue in the next few years, Ma said.
How will Hong Kong be affected by the US-China trade war?
Kerry officially entered Thailand’s express delivery market in 2006 when the company failed to get an operating licence in China under Beijing’s restrictions on foreign operators. A little more than a decade later, Kerry Express controls half of the Thai express delivery market, handling 700,000 packages every day, according to Macquarie Research.
Volume growth more than doubled in the past five years, with a compounded annual growth rate of 128 per cent, driven by rising demand from online shopping and e-commerce, according to Macquarie.
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august 2018 by alcalde
India is threatening the made-in-China industry – Tech in Asia
India is threatening the made-in-China industry
5 days ago
The following article is an adapted translation of this article, written by Wang Xinxi and published by Sina Tech.
The signs of a shift are everywhere. China, the world’s mobile phone manufacturing hub, is swiftly losing ground to India.
Consider: Not long ago, Samsung built a new mobile phone manufacturing plant in Noida, India. It’s Samsung’s second factory in the country, and is slated to become the world’s largest such plant, producing a whopping 120 million mobile phones per year.
Prior to that, Samsung had invested quite a bit in the Chinese manufacturing market. But as domestic economic growth slows, Samsung’s strategic vision has pivoted toward India.
Apple, Foxconn, and a host of other domestic mobile phone manufacturers have also invested in India-based manufacturing over the past couple of years. For example, last year, Apple began manufacturing some iPhones in India, and approached the Indian government about tax breaks to facilitate its suppliers manufacturing phones there.
And the list goes on. Acer’s spin-off manufacturing arm Wistron and Foxconn have both announced agreements with Indian government officials to rent land for local manufacturing purposes.
It’s not just the global players that are moving away. Virtually all of China’s phone manufacturers have established manufacturing in India. Vivo, Oppo, Xiaomi, and more all have factories there. Xiaomi, in fact, already has two, and earlier this year announced plans to open a third.
Even component makers like chipmaker Mediatek have announced plans to slow manufacturing programs in China as they shift toward India and other Southeast Asian locales.
One of the reasons for this is simple saturation; manufacturing growth and smartphone sales in China are slowing, while the comparatively unsaturated Indian market is heating up. With smartphone penetration in India is still only 30 percent, some phone manufacturers see the soon-to-be massive market as crucial to their future success and want to set up there before their competitors do.
Another reason: India’s government has incentivized local production through a variety of policies, including raising import duties on critical parts to make direct investment in India more financially compelling to manufacturers.
The biggest reason, of course, is money. Rent, equipment, and labor costs are all typically lower in India than China, meaning that manufacturers can produce phones more affordably there. And with costs in China being driven continuously upward by rising living standards even as local demand for smartphones slows, Chinese phone makers are finding themselves in a position where they need to make phones more cheaply even as all of their costs are rising.
The movement toward India, with its lower costs and far less saturated market, could thus prove very difficult to reverse.
China’s manufacturing industry worries
A mobile phone manufacturing shift away from China could cause serious problems. China’s manufacturing industry is an important part of the country’s economic power. And like India, China is a populous country. Without the stability provided by the manufacturing industry, China’s economy could experience a massive capital outflow.
India does have a comparative shortage of skilled laborers, but the movement of Chinese phone manufacturers to India will provide an opportunity for the country to both attract and train more skilled workers, speeding the development of the entire Indian mobile phone industry, including related sectors like R&D.
We have seen this effect before in China. When Foxconn established a massive presence in Zhengzhou, an entire vertical mobile phone supply chain took shape in the region. As mobile phone manufacturing becomes more established in India, the country will have a chance to become a more influential player in the global mobile phone industry as related businesses spring up around manufacturing hubs.
The current global climate, with America shouting about the return of domestic manufacturing and firms like Foxconn, Apple, and Samsung moving manufacturing to India, is a serious warning to the “made in China” industry.
Growing problems for China, with no obvious solutions
India’s Modi government has been touting the “make in India” plan since 2014, with the ultimate goal of making India the center of the global manufacturing industry. That strategy appears to be gradually coming to fruition.
India’s smartphone market is dominated by low-cost Android phones from domestic players like Lava, Intex, and Micromax, as well as Chinese firms like Xiaomi, Oppo, Lenovo, and Vivo. In the past, the Indian firms had trouble competing with Chinese companies on quality because they lacked access to a strong local supply chain, and many local factories like Micromax’s depended on Shenzhen subcontractors to meet their numbers. But as India’s domestic manufacturing industry grows, that’s becoming less true.
As far as the giants Apple and Samsung go, the Chinese consumer market remains crucially important. But their changes in supply chain strategy pose a definite risk to the Chinese manufacturing industry.
Finding a solution may be difficult. While America’s manufacturing industry dropped off naturally along with a corresponding boom in technology, research, and R&D, China’s manufacturing industry may not be as easily replaced, as the economic sectors needed to replace it are still developing.
And the mobile phone industry is but one signal of the broader trend that is Chinese manufacturing moving abroad. Electronics makers like Samsung, Toshiba, Panasonic, and Sony, are all considering cutting investments in Chinese manufacturing, setting their sights on countries like India. Even domestic manufacturers are moving more of their operations abroad in a bid to become more globally relevant and competitive.
At the same time, the “made in America” movement isn’t just a political slogan – data from the last few years shows that some manufacturing has indeed moved back to US shores.
The movement of low-cost manufacturing is probably an unstoppable trend. But at the same time, China’s technological development and local talent pool is not yet sufficient to support a large enough high-end manufacturing industry to replace all the departing low-cost players. So what’s good news for the development of manufacturing in Southeast Asian countries like India has all the makings of an impending concern, or perhaps even a crisis, for China.
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august 2018 by alcalde
60% Taiwanese blame China for blocking regional sports: poll | Politics | FocusTaiwan Mobile - CNA English News
CNA file photo
Taipei, July 31 (CNA) A recent survey commissioned by the ruling Democratic Progressive Party (DPP) has found that about 60 percent of Taiwanese people polled are angry at Taichung being stripped of the right to host the East Asian Youth Games due to China's objection, and that more than half blame China for its suppression of Taiwan.
The DPP on Tuesday published its results of the poll on the cancellation of the event that came after China initiated a vote at the East Asian Olympic Committees (EAOC) meeting July 24.
China blocked Taiwan from hosting the games slated for August next year, reportedly over its concern about a proposed referendum on whether the name "Taiwan" instead of "Chinese Taipei" should be used at the 2020 Tokyo Olympics and other international sports events.
The DPP survey found that 68.4 percent of the respondents were aware of the incident, and 31.6 percent were not. Asked whether they were indignant at China's suppression that led to the result, 60.1 percent said yes, and 25.8 percent said no.
Of the respondents who identified themselves as opposition pan-blue supporters, 51.1 percent said they felt angry about that, as were 46.7 percent of those who consider themselves non-partisan and 82.3 percent who described themselves as pan-green supporters, of which the DPP is the major party.
In the poll, the DPP posed the question of whether they attribute the cause of Taichung losing the hosting right to China's suppression or to the government's refusal to recognize the "1992 consensus," a formula that endorses the "one China" principle.
On that question, 54.8 percent put their blame on China, and 25.9 percent on the government's objection to the "1992 consensus."
The survey found that 84 percent of the respondents support Taichung and the Chinese Taipei Olympic Committee, which have filed separate petitions with the EAOC seeking to regain the right to host the games, while 7 percent said they did not support the moves.
The survey was conducted July 25-29. A total of 1,109 valid samples from people aged over 20 were collected from a telephone survey that had a confidence level of 95 percent and a margin of error of plus or minus 2.9 percentage points.
(By Shih Hsiu-chuan)
Enditem/J
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august 2018 by alcalde
NZ takes aim at China's growing influence
NZ takes aim at China's growing influence
Updated 3 days ago
New Zealand's government has for the first time pointed the finger directly at China's growing influence in the Pacific and joined Australia's outgoing Defence chief in criticising Beijing's militarisation of the South China Sea.
"Great power competition is back," New Zealand's Defence Minister, Ron Mark, told diplomats in Wellington on Friday.
"New Zealand values China and its relationship as a trading nation, but not we're blind to some of things we're seeing and we're not shy about discussing those matters [with them directly] ... That's what friends do."
Mr Mark's comments came at the launch of the overarching Strategic Defence Policy Statement released by New Zealand's Defence Force on Friday.
Among a plethora of other global and security issues, it paints a picture of an increasingly confident Chinese government.
While New Zealand has this year massively boosted its foreign aid funding - with the bulk going to Pacific nations - its top politicians have doggedly declined to specifically point to China and have appeared to take a softer than their American and Australian counterparts.
The new policy plan is candid by comparison.
"As China has integrated into the international order, it has not consistently adopted the governance and values championed by the order's traditional leaders," it reads.
"Both domestically and as a basis for international engagement, China holds views on human rights and freedom of information that stand in contrast to those that prevail in New Zealand."
And while noting New Zealand's defence and security co-operation with China had grown over the years, it also points to Beijing's increasing power in the Pacific.
"There are the issues of financial loans that bring with them, down the line, potentially other obligations. There is the issue of the South China Sea," Mr Mark told reporters.
But New Zealand had to take responsibility for foreign policy that had created a power vacuum in the Pacific, he said
Meanwhile, Australia's Air Chief Marshal Mark Binskin who retires as Defence chief on Friday, said China had lost of the trust of its Asian and Pacific neighbours with its aggressiveness in the South China Sea, and dismissed claims the military build-up on the Paracel and Spratly islands was for defence reasons.
Mr Mark on Friday said his government was not comfortable with the build-up.
The New Zealand report notes: "These posts now feature new radar and communications arrays, airstrips and hangars, deep water harbours, and weapons systems, which provide China with the ability to quickly deploy a range of additional capabilities in and around key international shipping lanes."
Media reports suggest Australia and New Zealand will in September sign a new security agreement with their Pacific island neighbours that could limit the military presence of China and Russia in the region.
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july 2018 by alcalde
Conceptions and Misconceptions of Digital Diplomacy
Conceptions and Misconceptions of Digital Diplomacy
2018-07-09
| Corneliu Bjola
In the introductory chapter to the edited volume on Digital Diplomacy: Theory and Practice that Marcus Holmes and I published four years ago, I asked the question of whether digital technologies could be seen as a harbinger of change for diplomacy, by revolutionising the way in which diplomats perform their traditional functions of representation, communication, negotiation. As the question remains valid today, it might be useful to take stock of the common conceptions and misconceptions of digital diplomacy so that we can get a better picture of how digital technologies have shaped expectations about diplomatic practice in the past decade and how digital diplomacy may continue to evolve in the coming years.
The Superman Myth
The first and surprisingly common misconception about digital diplomacy is the Superman myth, which claims that digital technologies can grant extraordinary powers to those using them, and in so doing, it can help them increase their diplomatic clout to levels they might otherwise not be able to reach. It is largely for this reason that small and medium-sized states (e.g., Sweden, the Netherlands, Mexico, Israel, Australia) have proved so keen adopters of digital diplomacy, as the latter presented itself to them as a great opportunity to ‘punch’ diplomatically above their political or economic weight. It is thus assumed that by being able to directly reach and engage millions of people, MFAs and their network of embassies could positively shape the views of the global public about the country of origin, and in so doing, they could increase the diplomatic standing of the country in bilateral or multilateral contexts. The argument has a seductive logic, not least because of the scope, scale and reach that digital diplomacy affords MFAs to pursue. At the same time, it suffers from a structural flaw namely, that digital technologies constitute a distinct source of power, which, if properly harnessed, can offset deficiencies in hard or soft power. In fact, the way in which digital technologies operate is by creating a platform through which other forms of power can be projected in support of certain foreign policy objectives. In short, the digital cannot give MFAs Superman strength, but it can help them channel the strength they already have more efficiently and productively.
The 'Walk in the Park’ myth
The second and fairly entrenched misconception is the ‘Walk in the Park’ myth, which supports the view that ‘going digital ’ is easy and MFAs can successfully pursue their digital diplomatic ambitions with relatively modest investments in training and resources. The speed by which the global public has migrated to the digital medium reinforces the idea of accessibility of social media platforms and the notion that anyone with basic technical skills can take part, shape and influence online conversations. What this view neglects, however, to acknowledge is the fact that with no clear direction or strategic compass, the tactical, trial-and-error methods by which MFAs seek to build their digital profile and maximize the impact of their online presence cannot demonstrate their value beyond message dissemination. In other words, the adoption of digital tools without an overarching strategy of how they should be used in support of certain foreign policy objectives runs the risk of digital diplomacy becoming decoupled from foreign policy. The strategic use of digital platforms imposes order on digital activities through the definition of measurable goals, target audiences and parameters for evaluation. The goals determine the target audience, which in turn, determines the platforms, methods and metrics to be used. This implies that training cannot be limited to the art of crafting messages, but it must professionalise itself and focus on developing skills by which digital diplomats can strategically harness the power of digital platforms towards achieving pre-defined and measurable goals.
The Extinction myth
The third and growing misconception is the Extinction myth, according to which digital diplomacy will gradually replace or make redundant traditional forms of diplomacy. On the weaker side of the myth, there is the perception that digital technologies have the capacity to fundamentally change how diplomats perform their traditional functions of representation, communication and negotiation to the point that they may even put an “end to diplomacy”, as Lord Palmerstone once similarly quipped when he took notice of the arrival of the telegraph. Stronger versions of the myth go a step further and acknowledge the possibility of having physical embassies and even diplomats replaced at some point by virtual reality (VR) and artificial intelligence (AI) respectively. While digital technologies have demonstrated clear potential for revolutionising how diplomats conduct public diplomacy, deliver consular services, or manage crises, one should nevertheless be mindful of the fact that the core function of diplomacy that is, relationship building and management cannot be accomplished without close and sustained human contact. The myth may thus be right about the fact that by increasing efficiency, digital technologies would likely reduce the number of diplomats required to perform certain routine functions. At the same time, the ‘extinction’ hypothesis is hardly credible as the negotiation of human values and interests cannot be delegated to machines and the amount of trust and mutual understanding that makes the ‘wheels’ of diplomacy turn cannot be built without humans.
The Darth Vader myth
The fourth and rather dark misconception of digital diplomacy is the Darth Vader myth, which sees the positive potential of digital platforms for engagement and cooperation at risk of being hijacked by the ‘dark side’ of the technology and redirected for propaganda use. The digital disinformation campaigns attributed to the Russian government, which has allegedly been seeking to disrupt electoral processes in Europe and the United States in the recent years, offer credible evidence in support of this view. More worryingly, the digital medium operates in such a way that makes it an easy target for propaganda use. Algorithmic dissemination of content and the circumvention of traditional media filters and opinion-formation gatekeepers, makes disinformation spread faster, reach deeper, be more emotionally charged, and most importantly, be more resilient due to the confirmation bias that online echo-chambers enable and reinforce. That being said, one should be mindful of the fact that any technology faces the problem of double use, as the case of nuclear energy clearly illustrates. Trends are also important to consider. With 3.02 billion people or 38% of the world population expected to be on social media by 2021, a fast growing rate of global mobile penetration and the anticipated launch of the 5G technology in the next few years, the potential for positive and meaningful digital diplomatic engagement is strong and substantial. As long as the prospective benefits of digital diplomacy outweigh the risks, the pollution of the online medium by the ‘dark side’ would likely stay contained, although its pernicious effects might not be completely eliminated.
As we look forward to the digital transformation of diplomacy in the next decade, it is also important to keep in mind the technological context in which MFAs are expected to operate. The 3G mobile technology made possible, for instance, the development and spread of social media networks. The 5G technology, which is due to arrive in just a few years, will likely usher in a whole new level of technological disruption, which could lead to the mass adoption of an entire range of tech tools of growing relevance for public diplomacy, such as mixed reality, satellite remote sensing or artificial intelligence. To a certain extent, the future is already here, as the appointment of the first ever ambassador to the Big Tech industry by Denmark in 2017, signals the arrival of a new form diplomatic engagement between state and non-state actors and the key role that technology is playing in this transformation.
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july 2018 by alcalde
National security: the public debate and the end of 'just trust us' | The Strategist
National security: the public debate and the end of 'just trust us' | The Strategist
Danielle Cave
National security: the public debate and the end of ‘just trust us’
Last week, Australian Signals Directorate Director-General Mike Burgess gave an on-the-record speech to ASPI’s artificial intelligence and national security masterclass. Following his speech, he took some tough questions from the media and the audience.
Public speeches by Australian security and intelligence chiefs are rare. Too rare. The website of the Australian Secret Intelligence Service, for example, very appropriately uses the singular ‘speech’ to capture the one time, six years ago, when a former director-general spoke to the Australian public.
A lot has changed since 2012 when we last heard from a director-general of ASIS. We are living in a time of global uncertainty where the rules-based international order isn’t what it once was. Our most important security alliances and economic relationships face fresh, often unexpected, challenges and pressures, many of which we aren’t well prepared for. And technology and cyberspace have helped create new threats, while also breathing life into old threats.
Has there ever been a more important time for this rarity to end?
This limited public engagement is more than just a neglect of—or indifference to—public communications. It has actually created problems for Australia at a time when our place in the world is under strain. It means, for example, that people are understandably sceptical when ‘national security concerns’ are cited to explain the latest international stance or policy position.
What does ‘national security concerns’ really mean when it’s said by one of our politicians or senior public servants? And does it mean the same thing every time it’s used by the government?
The Australian Financial Review’s Angus Grigg touched on this tension recently in ‘Can we trust the spies on China’s Huawei?’:
This refusal to divulge the details of Huawei’s alleged miss-steps, beyond the umbrella term of ‘national security concerns’, has been grudgingly accepted over the past six years.
But we shouldn’t have to grudgingly accept anything. If our national security agencies have evidence that is being used to underpin policy decisions—and that information can be shared without revealing sources, methods and access—then the government needs to work harder to get that information into the public domain (for example, by being more strategic with public messaging or releasing redacted/unclassified versions of reports).
Parts of the Australian intelligence and security community won’t like taking on more of this responsibility, and it won’t be easy. Ministers will have to empower senior officials to speak more freely and frequently. But ministers can’t shy away from this. After all, ensuring the public are as informed as possible about national security threats is in their interests. More importantly, it’s squarely within Australia’s interests.
Getting more information out into the public domain will also require a cultural shift in how Australia’s security and intelligence agencies have traditionally seen their place within government. But it’s a cultural shift that’s long overdue, and one that is already underway in other countries around the world (see every hyperlink in this paragraph).
Why is this so important? Because the ‘just trust us’ line is getting tired.
Having senior intelligence and security officials speak more freely and frequently will help inform, it will help build confidence and it will help foster public trust.
As my colleague Tom Uren wrote recently, some stories need to actually be told.
If the Australian government expects us to get on board with national security decisions, it’s going to have to be more proactive about getting out into the public domain to explain some of these issues, and the various tensions that colour them. But it’s not just the Australian government that must shoulder more responsibility for better informing public discourse on foreign policy and international security issues. Australia’s academics, think-tankers and journalists already play a vital role, but they, too, must become more proactive.
For example, there’s nothing more important to Australia’s future prosperity than understanding and navigating China’s rise, and Australia needs to invest in understanding its political, security and economic implications. As things stand, can we really say Australia is producing enough high-quality, relevant, timely and inquisitive research and reporting that helps us all understand this phenomenon? And understand it from a range of different perspectives?
One major problem is that at a time when we need them the most, our media outlets are retreating from reporting on the world and retreating from getting Australian reporting to the world. It’s no secret that Australia’s most talented journalists working on international, security and China-focused issues are already swamped trying to cover their expanding patches with precious few resources. In such an environment, important stories will of course be missed. Or, too often, they’re ‘covered’ by republishing American reporting (which leaves us wondering: what does this mean for Australia?).
On the research front, do we really have enough analysis coming out of our think tanks, universities and NGOs? Research undertaken by an assortment of specialists who bring different expertise to the tables? Specialists with a deep knowledge of the Chinese Communist Party and its structure; a proficiency in Chinese languages; and a strong understanding of China’s legal system, the lessons to be learned from history, and the current reforms undergoing in the People’s Liberation Army or the changing shape of China’s economy.
I’m going to say no.
Perhaps I’m saying ‘no’ because I’m greedy—I want more. And I want more from all disciplines. Democracy and decision-making are improved by better information and more informed debate, from diverse perspectives.
As ‘just trust us’ continues to hold less and less weight, we need to think carefully about, when it’s eventually ousted for good, what replaces it. We do not need more poorly informed research and reporting, valueless talking points or ‘whataboutism’. What we do need is more evidenced arguments, high-quality investigative reporting, policy-relevant research and analytical depth.
If we want to navigate Australia’s changing place in the world from the best position possible, we should all be working together—across government, media, industry and civil society—to avoid what we don’t need and encourage bucketloads of what we do need. Adding a ‘speeches’ tab to the barren websites of our various intelligence agencies would be a good place to start.
Danielle Cave is a senior analyst at ASPI’s International Cyber Policy Centre. Edited image courtesy of Twitter user @rachael_falk.
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july 2018 by alcalde
India will adopt a three-pronged strategy to check China influence | india news | Hindustan Times
India will adopt a three-pronged strategy to check China influence
In meetings with ambassadors Suhsma Swaraj reiterated, India must continue to closely watch all Chinese activities, and advise and educate friends in the neighbourhood about how a certain kind of economic engagement with Beijing can have negative consequences for them.
By Prashant Jha
India will adopt a broad, three-pronged approach to deal with China’s increasing engagement in the South Asian and Indian Ocean neighbourhood — track Beijing’s activities carefully; pursue its own projects and commitments; and educate and advise neighbours on the consequences of engaging with China.
External affairs minister Sushma Swaraj laid out this approach at a meeting with top diplomats posted in the neighbourhood last Tuesday on the sidelines of the Head of the Missions Conference, said four officials familiar with the development. The meeting was attended minister of state MJ Akbar; foreign secretary Vijay Gokhale; India’s ambassador to China Gautam Bambawale; and the country’s envoys to the South Asian Association for Regional Cooperation countries — Ajay Bisaria in Pakistan, Vinay Kumar in Afghanistan, Manjeev Singh Puri in Nepal, Harsh Vardhan Shringla in Bangladesh, Taranjit Singh Sandhu in Sri Lanka, Akhilesh Mishra in the Maldives and Jaideep Sarkar in Bhutan.
Indian high commissioner to Mauritius Abhay Thakur and ambassador to Myanmar Vikram Misri were also present.
This was a sub-set of the larger HOM Conference, a closed-door annual MEA affair. This year, multiple themes -- from the need to focus on Indians in distress abroad to deploying soft power and celebrating Gandhi’s 150th birth anniversary; from India’s global development assistance and cooperation to evolving regional and geopolitical dynamics - came up, said a fifth government official. Swaraj gave the inaugural address and PM Narendra Modi delivered the final keynote speech at the meeting.
It was on the sidelines of this conference that Swaraj held both individual and region-specific meetings with ambassadors posted in Europe, Gulf, African and Latin American countries, besides the neighbourhood. “The idea behind the region-specific meetings is to ensure a broad commonality of approach since there are many overlapping themes; it is to understand, in a free and frank internal setting, the views of different ambassadors and if there is anything the ministry can do to help,” said the fifth official.
Kicking off the neighbourhood meeting, according to the first official, Swaraj asked the ambassadors to give her a broad sense of what China was doing in each of their countries. Each envoy then spoke briefly about Beijing’s footprint in the country they serve.
According to the first four officials, the broad sense in the meeting was that in Pakistan, China’s economic and political dominance had only grown; in Afghanistan, China could not be a strategic partner but its economic and development footprint was minimal and there was room for engagement; in Nepal, while Beijing’s involvement had grown, PM K P Oli’s recent visit to China had not broken new ground and was a reiteration of past agreements; in Bangladesh, while the Chinese have made huge economic commitments, many in Dhaka were wary of the ‘debt trap’ Sri Lanka found itself in; in Sri Lanka, while the government remained politically friendly to India, its economic ties with China had continued apace. In the Maldives, according to the first and second officials, the presentation focused on how there was a conscious attempt by the regime in Male to erase the Indian footprint altogether and China had gained tremendous leverage with investments, already made or in progress, in an airport, bridge, islands and port.
One ambassador, according to the third official, laid out the border context and emphasised that Beijing had given up its defensive posture and was aiming for a ‘Pax Sinica’, indicating its ambitions of hegemony. “India has to recognise this and make a choice accordingly,” the official said.
After listening to all the presentations, Swaraj said - according to both the first and second official - that Delhi’s focus must not be on competing with China on resources.
Instead, she reiterated, India must continue to closely watch all Chinese activities; it must push ahead, with full vigour, its own work, and advise and educate friends in the neighbourhood about how a certain kind of economic engagement with Beijing can have negative consequences for them. This refers broadly to the phenomena of big investments in economically unviable projects with Chinese loans, which then gives Beijing both an economic and strategic foothold and “traps” the country.
The fifth government, official, however said that it would be wrong to read any such deliberations as policy. “You must see this in the nature of an internal brainstorming meeting as a part of a broader conversation on a range of themes. The idea was to seek everyone’s views; it is a free-wheeling conversation. Everyone is encouraged to speak their minds. This is not in the nature of a policy directive. It is a constructive in-house engagement to understand evolving geopolitics. To interpret this as policy would be wrong.”
It is important to understand that China is now explicit about its global and regional ambitions, and within that, its periphery is of high priority, said Ashok Kantha, former ambassador to China and director of the Institute of Chinese Studies.
“On our response, the most important part is not to try to mimic or ape China. We don’t have to be paranoid about them in the neighbourhood either. They have their own advantages and disadvantages. We need to work on our strengths and leverage those. There is extensive synergy and our inter-connectedness straddles across domains -- from physical proximity to economic ties to cultural links,” Kantha said. He added: “It is not a question of us educating them, but countries can increasingly see the pitfalls of going ahead with projects which may not be economically viable, without due diligence. They can see the BRI (Belt and Road Initiative) is not the free largesse it was supposed to be. Sri Lanka is a cautionary tale.”
BRI is a Chinese initiative to expand its influence abroad by financing infrastructure projects including railways, roads and power projects, thereby opening up potentially lucrative business opportunities for Chinese companies.
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july 2018 by alcalde
China's 'firefighter' vice president avoids flames of U.S. trade war | Article [AMP] | Reuters
China's 'firefighter' vice president avoids flames of U.S. trade war
(Reuters) - As the flames of a trade war between China and the United States lick higher, one top Chinese leader expected to help handle relations with Washington has been conspicuous for not taking a public role in the dispute - Vice President Wang Qishan.
Known in Chinese government circles as "the firefighter" for his central role in tackling issues like corruption and domestic financial problems, Wang also has experience dealing with the United States - leading annual economic talks with Washington when he was a vice premier.
As a result, Wang had been tipped by foreign diplomats to take a central position in handling U.S. President Donald Trump's administration when he became vice president.
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These expectations had been heightened when prior to his appointment in March, Wang had private meetings with U.S. ambassador to China Terry Branstad, and with former Trump adviser Steve Bannon. He also held closed-door meetings with U.S. executives in recent months, sources in the U.S. business community say.
But aside from the occasional public meeting with U.S. visitors - the last time was in mid-May when he met U.S. business executives in Beijing - and the odd appearance elsewhere, including at a forum in Russia in late May, Wang has kept a low profile.
The week before last, for example, the only news he appeared to make was when he met Bangladesh's foreign minister and when he was appointed honorary president of the Chinese Red Cross.
For some China watchers his absence is a bad omen for the state of Sino-U.S. relations despite Trump's continued insistence that Xi is a close friend. If there was going to be a breakthrough in the trade row anytime soon then they would expect Wang to be taking a more prominent role.
"Wang Qishan would be crazy to get on a plane until there were far greater assurances there is a deal to be had and the deal would stick," said Scott Kennedy, deputy director of the Freeman Chair in China Studies at the Center for Strategic and International Studies in Washington.
TRUMP'S LATEST THREAT
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One source with knowledge of Wang's meetings with U.S. business leaders said the vice president is only going to get involved when "he can have a clear view of how he can negotiate a solid outcome." When there is something to be negotiated, Wang will probably insert himself in some way, this person said.
Neither the foreign ministry nor the cabinet's spokesman's office responded to a request for comment on Wang and his role in the U.S. trade dispute. There is no public contact information for the vice president's office.
The last round of trade talks with Washington, led for China by Vice Premier Liu He, failed to head off a U.S. decision to impose punitive tariffs on $34 billion of Chinese imports on Friday, with another $16 billion of goods to be targeted in a second phase. China retaliated with its own increased tariffs on $34 billion of U.S. imports to China.
Perhaps most worrying of all for China, Trump warned the U.S. administration may ultimately target more than $500 billion worth of Chinese goods, or roughly the total amount that the United States imported from China last year.
China has indicated it will respond with its own measures against the U.S. each time Washington ratchets up the tariffs.
Wang's diplomacy has been low-key and behind the scenes, and there is no sign he has lost his status as a key decision maker and political player, diplomats say.
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A smoker who is 70 this month, Wang is more senior than both the Chinese government's most senior diplomat, State Councillor Wang Yi, and Politburo member Yang Jiechi, who heads the Communist Party's foreign affairs commission.
Unlike the urbane, Harvard-educated Vice Premier Liu, Wang does not speak English, though he has a penchant for no-nonsense, direct talk behind closed doors, those who have seen him in action say.
CLOSE TO XI
A senior Western diplomat said Beijing appeared to be reluctant for Wang to get involved after Liu had the rug pulled out from under him by Trump's reneging on a previously agreed "consensus" to resolve the trade spat in May.
Wang is extremely close to President Xi Jinping and reports directly to him, meaning if a similar thing had happened to Wang it would be seen as a personal snub to Xi, the diplomat said.
"You can embarrass the vice premier but not the vice president," the diplomat said, speaking on condition of anonymity.
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Beijing has struggled to work out what Washington really wants, especially given the U.S. trade negotiating team has been split between those who tend to favor free trade and those who are more protectionist, a source with ties to the Chinese leadership told Reuters. This has led to confusing and sometimes contradictory statements from different officials.
"It's reneging on one's words," said the source, quoting a saying attributed to ancient Chinese philosopher Mencius that state media has increasingly used to refer to the U.S. administration's struggle to give a single unified message.
(Reporting by Michael Martina and Ben Blanchard; Editing by Martin Howell)
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China Dream by Ma Jian
China Dream by Ma Jian
A poetic and unflinching fable about tyranny, guilt, and the erasure of history, by the banned Chinese writer hailed as ‘China’s Solzhenitsyn’.
In seven dream-like episodes, Ma Jian charts the psychological disintegration of a Chinese provincial leader who is haunted by nightmares of his violent past. From exile, Ma Jian shoots an arrow at President Xi Jinping’s ‘China Dream’ propaganda, creating a biting satire of totalitarianism that reveals what happens to a nation when it is blinded by materialism and governed by violence and lies. Blending tragic and absurd reality with myth and fantasy, this dystopian novel is a portrait not of an imagined future, but of China today.
PRAISE FOR MA JIAN'S WORK
‘A landmark work of fiction’ Daily Telegraph
‘Worthy of Swift or Orwell’ Observer
‘A modern literary masterpiece’ Sunday Express
‘Monumental . . . Riveting . . . A mighty gesture of remembrance against the encroaching forces of silence’ Guardian
‘A born storyteller who has the artistry and intellect to evoke a staggeringly large and densely peopled world. His language is precise and sublimely visual; it is painfully funny’ Madeleine Thien
‘In scene after scene of black satire, lyric tenderness and desolating tragedy . . . this fearless epic of history and memory establishes Ma Jian as the Solzhenitsyn of China’s forgetful drive towards world domination’ Independent
‘Ma Jian has accomplished something extremely difficult. That is, he has created a work of art that functions simultaneously as literature and call to action’ New York Review of Books
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Mike Pompeo talks Iran, North Korea, China and Russia in wide-ranging interview - Axios
Mike Pompeo outlines Trump's greatest foreign policy challenges
Haley BritzkyJun 23
Secretary of State Mike Pompeo sat down with MSNBC's Hugh Hewitt this morning to talk Kim Jong-un, the Iran threat, and more.
Why it matters: President Trump has had a whirlwind few months on foreign policy: pulling out of the Iran deal, executing a historic sit-down with North Korean dictator Kim Jong-un, and a combative end to the G7 summit earlier this month.
What Pompeo said:
On the signed agreement with North Korea: "I think it is fair to say that there are a number of things...that have been agreed to, that I think both parties understand, red lines, things that we – neither country is prepared to go past that give us an opportunity to believe that...perhaps this time is different."
On Kim Jong-un: "[H]e does have a sense of humor. He’s conversant in things Western, so he’s paying close attention to what takes place. ... So he’s bright. He knows the file. He knows the topic very, very well. He’s not turning to others for guidance."
On Iran: "I hope they recognize that whatever decision other countries make about staying in the JCPOA or however they proceed, I hope he — they understand that if they begin to ramp up their nuclear program, the wrath of the entire world will fall upon them. And so it is not in their practical best interest to begin that. ... When I say 'wrath,' I mean the moral opprobrium and economic power."
On Chinese President Xi Jinping: "He has consolidated power in a way that his immediate predecessors had not, in a way that’s truly historic. And the United States and the other countries in the region as well need to recognize that. ... We all need to acknowledge what China presents in terms of both opportunity and challenge."
On Russia: "The President’s been unambiguous since he took office that there are places where Russia is working against the United States but many places where we work together. ... Some of the behaviors that they’re undertaking in places like Syria and Ukraine are just — they’re not helpful, they’re not constructive towards the values that the Americans hold dear. And those places we’ll continue to work to make sure they know our interests and our concerns."
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Modi Needs to Show India Has Teeth – Foreign Policy
Modi Needs to Show India Has Teeth
Asia is ready for India to step up as the United States withdraws.
May 31, 2018
Indian Prime Minister Narendra Modi gestures while addressing a rally in Bangalore on February 4, 2018. (MANJUNATH KIRAN/AFP/Getty Images)
Asia’s premier security meeting is this week, and all eyes will be on Indian Prime Minister Narendra Modi as he gives his keynote speech — the first for an Indian leader. The defense chiefs and diplomats at the Shangri-La Dialogue are eager to see whether Modi — and India — have the chops to take on an increasingly critical regional role.
Asia’s uncertain political and economic climate presents an opportunity for Modi. U.S. President Donald Trump’s policies, including the withdrawal from the Trans-Pacific Partnership trade agreement and a purely transactional approach to longtime alliances, have contributed to strategic drift in the region as China grows assertive and authoritarian. The situation calls for steady leadership — and the United States and its Pacific allies better hope that New Delhi can deliver.
One of the few things Washington’s leaders can agree on is that the Asian century should be India’s as much as China’s. Yet, India’s inadequate defense-industrial base and lack of regional economic integration threaten to frustrate its ambitions. Modi needs to convince Asia’s elites that his country is ready to become a leading power that can ensure no one country can dominate the region’s future.
It’s fitting Modi gets the historic honor of taking center stage. Singapore, the host of the summit, has longed for New Delhi to provide strategic balance to the Asia-Pacific since the early days of the city-state’s founder, Lee Kuan Yew. One of Modi’s early foreign-policy moves was to replace India’s “Look East” approach with a more energetic “Act East” strategy.
The country has since made some tantalizing moves eastward, but Singapore is not alone in wanting India to show up and stand out. Most Asian governments would love to witness Modi declare a strong and sustained commitment, backed by resources, to being a leading power championing well-accepted norms. But until recently, India lacked the national capacity for a bigger, bolder regional policy.
Few things would send a more reassuring message than signs of seriousness about India’s military modernization. The country’s 2018 defense budget doesn’t exceed 1.5 percent of GDP, and the military still has acute shortfalls in major weapons systems like fighter jets, basic infantry combat equipment, and even ammunition. The best estimates of China’s defense spending are about 2 percent of its GDP, but Beijing’s economy was almost five times the size of India’s in 2016. As the world’s fastest-growing large economy, India is getting better positioned to build its defense capabilities if it can muster the political will, streamline procurements, and improve both civil-military and intra-services coordination.
Modi can start close to home, where India’s abilities and interests are the strongest, by announcing a beefed-up presence in the Indian Ocean, as well as assistance and capacity-building activities in the Bay of Bengal region. China is testing India around South Asia and surrounding maritime trade and energy routes as never before. Events this winter in the Maldives led some commentators to wonder whether its leader, Abdulla Yameen, was shifting allegiances from New Delhi to Beijing. Modi must meet the challenge. As former Indian Foreign Secretary Shyam Saran has written, “It is India’s neighbourhood that holds the key to its emergence as a regional and global power.”
Modi should also call on collective efforts to help strengthen the maritime capacity of Southeast Asia. The region will listen attentively to what he says about related disputes and the need to resolve them peacefully and in accordance with global rules. China’s militarization of the South China Sea flouts international law. Both Asian giants recently faced adverse rulings on claims at sea by United Nations arbitral tribunals. But only one — India — accepted the decision, in favor of Bangladesh in the Bay of Bengal.
India has already been growing its security partnerships in the face of a rising China. It has rapidly expanded security ties with Japan and Vietnam, participated in sea exercises with other powers, and joined the revival of the quadrilateral U.S.-Japan-India-Australia democratic security grouping. Getting the band back together is positive, but Southeast Asia doesn’t want to be left out. The 10 Association of Southeast Asian Nations countries await confirmation that the Quad complements, not substitutes for, that body’s centrality and the inclusive multilateralism that ASEAN-led frameworks represent.
The Indian government missed an opportunity to reassert the importance of freedom of navigation and overflight and respect for international law after the four nations met last year. Modi can restate these principles and also call for greater cooperation with Europe’s democracies. France, for example, has significant Indian Ocean interests and is sending clear signals to India, Australia, and the region that it’s ready to work together. Northeast Asian delegates will arrive preoccupied by the latest theatrics on the Korean Peninsula, whatever tweet-driven drama prevails that week. India isn’t a central player here but should maintain solidarity with friends and keep regional pressure on North Korea to denuclearize without delay, complicating China’s resumption of business as usual with its client.
Of course, all the attendees will lean in when Modi turns to the region’s two heavyweights. Now isn’t the time to betray anxiety over Washington’s unpredictability. He should embrace the nation best equipped to underwrite India’s defense and technological transformation — and, even today, Asia’s rules-based security order. While at it, Modi can gently remind the United States why it’s in its own self-interest to do so.
At the same time, there’s no reason India shouldn’t accelerate the building of ties with Australia and South Korea, and in Southeast Asia, cultivate closer relations with Indonesia, Singapore, and the new Malaysian government. As China’s influence expands to include the Indian Ocean and the South Pacific, the region is headed toward more networked security partnerships. Modi should welcome this variable geometry.
Modi and Chinese President Xi Jinping recently tried to reset fraying ties after a tense border confrontation. It’s important they try, even though the giants’ inveterate mistrust suggests the détente may not last. Smaller countries are watching to see if India stands its ground. But the region also doesn’t want conflict. For most, the logic of interdependence lies intact.
That may start to change as China’s Belt and Road Initiative to build Eurasian infrastructure creates potential debt traps, as has already happened in Sri Lanka, and Beijing’s political and military leverage limits countries’ independence. Thus far, territorial grievances with Pakistan and sovereignty concerns have animated New Delhi’s criticism of the initiative. This can come across as too myopic. Modi should pivot to making the case that India, Japan, and the West offer bankable alternatives for the private sector, while keeping the door open to partnering selectively with China.
Companies — and their governments — need greater confidence India will restart economic reforms after next spring’s parliamentary elections. A pledge to reinvigorate its efforts to conclude the Regional Comprehensive Economic Partnership would draw resounding applause. India is understandably nervous about opening up its agriculture and manufacturing to China and 14 other countries. But it needs to meet them in the middle to strengthen global competitiveness and enable its high-skilled services professionals to work abroad. Both India and Southeast Asia have far more to gain strategically and economically by finding a way forward and protecting against overdependence on China.
India’s willingness to advance deeper economic integration with the region is also essential. After all, it’s much harder to be a reliable security partner while arguing with everyone over trade and often sitting outside Asia’s supply chains.
Finally, Modi shouldn’t shy away from highlighting liberal values such as openness, tolerance, and rule of law. It’s these attributes that make India’s rise so compelling and essential to the preservation of the Asian order. Building New Delhi’s soft power requires tackling India’s own injustices and addressing the horrors suffered by the Rohingya (and other groups) in Myanmar and now Bangladesh.
Modi has the perfect moment to show world leaders that India’s future belongs at the high table of global powers — and that its ascendancy comes with obvious benefits for their countries.
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