Category: China

Development Model of EMEs Goes Against Environment Protecting Laws

Article first published as Development Model of EMEs Goes Against Environment Protecting Laws on Blogcritics.

Two international conferences aimed at formulating an agreement to be accepted by all countries of the world have failed to achieve their goal. Copenhagen Conference in December 2009 and South Korea Conference in December 2010 have utterly failed due to pressures from multinational companies of the US and the EU, which are mainly responsible for theGlobal-Climate-Change greenhouse gas emissions and hence for increase in temperature of the Earth planet. Recently, the development model proposed for the Emerging Market Economies (EMEs) by the world’s big powers such as the US, the EU and Japan along with WB and IMF are adding fuel to fire.

Because of the policies of Liberalisation, Privatisation and Globalisation, forced through WB and IMF by the imperialist powers, EMEs have become so by relegating welfare principles of the state capitalism implemented for the so-called benefit of people by the earlier leaders of those countries. As national character of the ruling classes in majority of the EMEs are subservient to the interests of the imperial powers these countries adapted principles of the free market economy with the successful conclusion of the Uruguay Round trade negotiations under supervision of the imperialist countries.

As environmental concerns occupied the main stage in imperialist countries because of the movements of the environmental organisations, such countries have brought tough environment laws that effectively limited the activities of the multinational companies. MNCs of the imperial countries had to curtail their production activities to escape from higher costs emanated from the environment laws. They shifted their production and assembling activities to third world countries to benefit from the absence of tough environment laws along with utilising cheap labour costs available in those countries.

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Trade Disputes Arise over Export Quotas of Rare Earth Minerals

Potential for trade disputes is raising over China’s export quotas of rare earth minerals crucial for manufacturing key electronic parts. China said it would reduce export quotas of rare earth minerals by 35 percent for the year 2011. The US said last week that it would file a case at WTO. Electronics manufacturers are heavily dependent on China’s exports of rare earths, as it owns major part of world’s rare earths reserves. China is estimated to contain almost 90 to 97 percent of world’s reserves of those minerals.

Rare earth minerals are a group of 17 chemically similar elements that include scandium, yttriumchina us trade disputes and fifteen lanthanides. Elements such as neodymium, cerium and lanthanum are called lanthanides. These elements collectively occupy a close area in the periodic table. These are used for making many electronic goods such as smart phones, monitors of TVs and PCs, hard discs of laptops, condensers, magnets in batteries of hybrid cars and headphones of Apple iPods. It is almost impossible to imagine a world without these electronic goods nowadays.

China has been cutting export quotas of rare earths for last few years, which has become a controversial issue in world trade. Previously China said it was cutting down exports to meet domestic demand. China is also telling that the companies involved in mining and export of rare earths are causing enormous environmental damage. China wants to control excessive mining that became severe especially in Southern China a spokesperson of the Chinese commerce ministry is quoted as saying by BBC news.

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Inflation, a Major Policy Concern for China Government

China Government is geared up to control inflation in coming months. It intends to control inflation by controlling money supply and lending. Fears of asset bubble and price rise are haunting Chinese government. Analysts are expecting drastic measures from the Central Bank including further rate rises.

China increased interest rate by 25 basis points on Christmas surprising analysts. China inflation has reached 28-month high due to rising food and asset prices. Excess cash in the system is seen as major driver of inflation. The task of taming inflation will be a priority for the Chinese government in the next year, Reuters noted.

A deputy governor of Central Bank, Hu Xiaolian issued a statement on its website on Monday. Hu reiterated the central bank’s determination to drain excess cash from the financial system by using all tools at its disposal such as interest rates, reserve requirement ratios, open market operations and more.

Foreign investors view China’s inflation-controlling measures as a signal for strong growth of Chinese economy. Chinese officials are confident that the growth of Chinese economy is supported by strong and sustained recovery.

China Raises Interest Rate on Christmas Day

China raised interest rate by 25 basis points to 5.81 percent to analysts’ surprise. Many thought China would hold interest rate on the eve of Christmas. It also raised repo rate or deposit rate by 25 basis points to 2.75 percent. China’s rate raise shows that China is committed to fight rising inflation. The interest rate was raised last time on October 19 for the first time after the world financial crisis.

China worries are centred on inflation and property bubble. Food prices are on rise in China threatening widespread unrest. Property rates are also rising threatening to cause a property bubble. China’s rate rise has to be seen in this background. Rate rise also signals that China is confident that its growth gained strong hold.

China inflation was recorded 5.5 percent in November last week. China raised banks’ reserve requirements six times in 2010 restricting them from lending.

China Worries More for EU’s Growth than for Its Own People

China offered to take concerted action to help financial stability of Europe, the countries of which are haunted by sovereign debt crisis since the beginning of 2010. European officials informed that Chinese vice premiere Wang Qishan gave assurances that China was ready to support European efforts for stabilisation, while speaking to the annual China-EU High LevelWen-Jiabao Economic and Trade Dialogue on Tuesday, December 21, as per FT report.

Chinese spokesperson Jiang Yu is today quoted by BBC News as reiterating Chinese vice premiere’s pledge to support the EU to overcome debt crisis. China’s support majorly stems from bond purchases though it did not give specific details of its support. China has been buying bonds of most indebted countries of the Eurozone such as Greece, Ireland and Portugal. Many analysts are forecasting that Portugal may be the next Eurozone country to tap Eurozone stability fund. Spain’s debt costs are also on rise, prompting speculations over Spain’s ability to raise further bond funds.

China’s Prime Minister Wen Jiabao visited Greece in October. He promised to Greece that China would buy Greece bonds and increase their investments in Greece. Similarly, China’s President Hu Jintao toured Portugal in November. During his trip, he said China would take concrete measures to support Portugal that included bond purchases.

The reason for China’s enthusiasm to support EU’s financial stability is obvious. The EU is China’s largest trading partner. Two-way trade between China and the EU in first eleven months of this year stood at $434 billion and that is why Beijing is interested in regional stability. However, bond costs continued to rise during last three months even though China bought public debts of Greece and Portugal. Therefore, it is doubtful that China’s support to Eurozone would be transformed into the fiscal stability of Eurozone and the EU as a whole.

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North Korea Restrained Itself from Retaliation

North Korea restrained itself from retaliating South Korea’s life-fire464 military drill that went on as planned in Yeonpyeong Island, with a small contingent of the US personnel helping the drill. North Korea said the world would now understand who the true champion of peace was and who the real provocateur of a war was.

After the drill, China reiterated both sides to observe restraint and called to prefer dialogue when problem arises. Russia also urged both sides to restrain from provocation as reported by BBC News.

Meanwhile, UN Security Council talks ended without a deal on the weekend, reportedly after China refused to agree to a statement critical of its ally, the North. The US has backed the South’s right to carry out the exercises. Bill Richardson, the governor of New Mexico is in North Korea as an unofficial envoy for the US to soften the atmosphere. CNN reported that northern officials told Mr Richardson they would allow UN nuclear inspectors back into the country, but there has been no official comment.

Japan Reviews Military Policy, Focus Shifts to China

Japan revealed its intentions to make substantial changes to its defence policies on the pretext of China’s increasing military might and North Korea’s nuclear weapons. Japan has maritime border with China. Japan’s new national defence policy has acquired importance in the wake of recent rise of tensions between China and Japan when a Chinese trawler hit a Japanese petrol boars near disputed chain coral islands on which both countries have ownership claims.

China has been strengthening its military utilising its trade surplus and foreign currency reservesWeather Map :AP AM NC 1-24 WEATHER MAP due to which its neighbours such as India with which it has border disputes, Japan with which it has disputes on ownership over coral islands in South China Sea, and Taiwan on which it has ownership claim have rising concerns. The US is also worried with China’s military build-up as it feels China is threatening the US’ interests in South Asia and East Asia regions. The secretary of state for the US Ms Hillary Clinton expressed openly her concerns that China was ascertaining its domination in the region.

Recently, the US conducted military drill with South Korea in Yellow Sea after North Korea fired artillery shells on a disputed South Korea’s island near maritime border. Though, the US said the military drills were part of regular exercises, its main aim was to issue veiled warning to Chinese military, which has been ascertaining its position in the region. The US accused China for not reigning in North Korea’s behaviour during recent tensions in Korean peninsula. It has 50,000 troops stationed in a Japanese island Okinawa and 28,500 troops in South Korea.

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China Inflation Beats Expectations

China inflation reached a 28-month high beating analysts forecast figure. China inflation is threating China’s growth. China is believed to lead growth of world economy after the worst financial crisis erupted in October 2008. China implementedChina food prices a stimulus package worth $586 billion to offset the effect of the financial crisis, originated in the US and spread rapidly to whole of the world.

Because of China’s stimulus, food prices began to rise. China’s inflation stood at 4.4% in October. It rose to 5.1% year-on-year in November prompting the government to raise benchmark interest rate. China increased its bank rate for the first time in October 2010 after the financial crisis. China’s target figure for inflation has been 3%. Food prices are rising in China contributing to inflation rise. Chinese authorities fear poor people will resort to riots due to rising food prices.

U.S. Worries Over China’s Influence in Africa –WikiLeaks

The US is worried over increasing influence of China in Africa. China has been investing in Africa for minerals and other resources keeping its own resources untouched. Wikileaks released a cable yesterday on November 9, which revealed how Shell oil company infiltrated into Nigerian government and how US is worried about growing influence of China in Africa. The US ambassador is concerned that China will soon develop strategic relations such as military training and communications development.

A February cables quotes a senior US official in Nigeria’s main city, Lagos, describing China as "aggressive and pernicious with no morals". US diplomatic cables sent from Africa also reveal Shell oil company’s claims that it infiltrated Nigerian ministries. The cable quotes Johnnie Carson, US Assistant Secretary for African Affairs, who had been meeting oil company representatives in Lagos.

Carson says China is in Africa for its own gains. He also opines that China is in Africa for securing votes in United Nations from African countries. Carson’s opinion is that the US is working in Africa to secure democracy and capitalism where as China has authoritarian capitalism. He criticised China for dealing with Mugabe’s Zimbabwe and Bashir’s Sudan.

Another US cable talks about China’s military and intelligence support for the government of Kenya. A Chinese enterprise is said to have won a contract to supply telephone-monitoring equipment to Kenya after bribes were paid while on a trip to China. Its influence in Kenya is said to have grown rapidly, with Chinese involvement in a host of infrastructure projects as well as collaboration with Kenya’s National Security and Intelligence Service.

The secret cables also say that Shell’s top executive in Nigeria at the time, Ann Pickard, told US diplomats that Shell Oil Company has good access to government information. A cable dated 20 October 2009 reveals a conversation Ms Pickard had with the then US ambassador to Nigeria, Robin Renee Sanders.

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U.S. goes to Basics over Copenhagen accord tactics | 03/2/2010

Close reading of the cables released by WikiLeaks reveals in excruciating detail the US tactics deployed to achieve its aim of overwhelming the opposition to the Copenhagen accord.

In the cable requesting intelligence from UN diplomats, it names specificBasic conference countries of interest, including China, France, Japan, Mexico, Russia and the European Union, and seeks biographical details of individuals such as credit card and frequent-flyer numbers. It also seeks compromising intelligence on the officials running the climate negotiations, such as "efforts by treaty secretariats to influence treaty negotiations or compliance".

Despite pushing the accord hard, America’s deputy climate-change envoy, Jonathan Pershing, revealed some concerns about it in the meeting with the EU climate action commissioner, Connie Hedegaard. The cable notes Pershing saying the national action plans to cut emissions submitted, "by some major economies were ‘opaque’". Hedegaard agrees – "China’s submission was open to interpretation" and Pershing says, "Brazil’s and India’s submissions were as well".

In the other key cable from Brussels, the US deputy national security adviser, Michael Froman, gives an admiring assessment of the Basic countries’ tactics of opposition: "It is remarkable how closely co-ordinated the Basic group has become in international fora, taking turns to impede US/EU initiatives and playing the US and EU off against each other. Basic countries have widely differing interests, but have subordinated these to their common short-term goals. The US and EU need to learn from this co-ordination and work much more closely and effectively together ourselves, to better handle third country obstructionism and avoid future train wrecks on climate, Doha or financial regulatory reform."

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North Korea may Attack Again

South Korea’s Yonhap news agency quoted the director of South Korea’s Nationalkoreas fire Intelligence Service as saying that there was a high possibility that the North Korea would make another attack, BBC reported. South Korea is planning another round military drill with the US in this month.

Four people were killed and 18 were injured when North Korea fired dozens of artillery shells on November 23 onto the South Korean island “Yeonpyeong” near maritime boarder of the two Koreas. North Korea said South Korea fired first. South Korea said it fired westward but not northward.

China Blocks Censuring North Korea in UN

AFP was quoted as reporting by BBC News that China has blocked a formal censure of North Korea in the United Nations for shelling South Korea’s island, which 40 miles away from South Korea but only 7 miles away from North Korea. The news comes at a time when it is revealed through ‘wikileaks’ new set of revelations that China is frustrated with North Korea’s behaviour of acting like a spoiled child to attract the US’ attention by carrying out missile tests in AprilKorea fire 2009.

BBC reports quoting unconfirmed reports that Chinese law maker Dai Bingguo was invited to Pyongyang for discussions. Also, an aide to North Korea leader Kim-Jong-Ill was invited to Beijing. China called for immediate resumption of six party talks to diffuse the tension developed after two Koreas exchanged fire few days back. North Korea warned over joint military drill by the US and South Korea that it would respond second time and even third time if South Korean warmongers continued to provoke by prolonging the joint military drill. China also expressed its anger over joint military drill.

Meanwhile, South Korea and the US have decided to continue their joint military drill after a few days gap. The next drill may take place after a few days in December. The present exercises will end on Wednesday, December 01. Separately, South Korea is planning what it calls routine week-long naval live-fire exercises from 29 sites around the country. These exercises will last for several weeks.

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China Does Not Like North Korea, Wikileaks Reveals

China is frustrated with North Korea’s attitude, Wikileaks third despatch reveals. One of the cables released on Monday says, China’s Vice Foreign Minister, He Yafei, told the US charge d’affaires in Beijing that North Korea was behaving like a "spoiled child" to get Washington’swikileaks attention in April 2009 by carrying out missile tests. Another cable in September 2009 says Mr He Yafei downplayed the visit of China’s premier Wen Jiabao to Pyongyong saying US deputy secretary of state Mr James Steinberg, “We may not like them… (But) they are a neighbour.” He also said Wen would push for denuclearisation and a return to talks.

Another cable reveals a discussion in February 2010 between former South Korean vice foreign minister Chun Yung-Woo and the US ambassador to Seoul Kathleen Stephens. The minister was quoted as saying that the new younger generation in China would not regard North Korea as a reliable ally and they would not risk another war in Korean peninsula. Ms Stephens added, "The PRC would be comfortable with a reunified Korea controlled by Seoul and anchored to the United States in a ‘benign alliance’ – as long as Korea was not hostile towards China."

Six party talks to defuse the nuclear ambitions of North Korea were stalled in April 2009 after North Korea test fired missiles. The US and South Korea say talks cannot be resumed until North Korea makes a genuine offer on stalling its nuclear tests.

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China for Emergency Meeting over Tension in Korean Peninsula

China has called for an emergency meeting of members of the six-party in December, authorised to discuss on nuclear programme of North Korea, to discuss the latest tensions raised in Korean peninsula. Two Koreas, China, Japan, Russia and the US are members of the six-party. The six-partite talks were stalled in April 2009 with the South Korea and the US stating that North Korea should stop pursuing nuclear programme first before resuming the talks.

However, the US and South Korea are said to be less than enthusiastic towards China’s proposal.koreas fire China says the proposed talks are not the resumption of six partite talks. But, it said there is an urgent need to resume the six partite talks. South Korea said it would review Chines proposals carefully adding that it was not interested in earlier resumption of six partite talks. Japan responded that it would deal with the issue cautiously in cooperation with the US and South Korea.

The tensions rose, when North Korea fired dozens of shells onto a disputed South Korean island from where South Korea test fired a few shots as part of usual military drill. North Korea said it had warned to stop the drills. Now South Korea and the US are conducting joint military drill 125 km south of the maritime border.

China Expresses Displeasure over Joint US-South Korea Military Drill

China expressed concern about joint military drill by US and South Korea planned for Sunday,USS George Washington November 28. The US’ warship “USS George Washington” housing crew of 6,000 mariners is reaching Yellow Sea waters where the joint military drill is planned. On the other hand, North Korea warned it would wage second and even third of attacks if the warmongers of the South Korea made reckless military provocations again.

China previously criticized the joint military exercises of the US and Japan in South China Sea when potential rift developed between Japan and China after a Chinese trawler driver was arrested by Japan near disputed set of islands on which both China and Japan have claims.

The US is worried that China is increasingly becoming assertive in China Sea waters militarily.

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