From Volume 6, Issue Number 11 of EIR Online, Published Mar. 13, 2007
Asia News Digest

U.S. Gets an 'Almost Base' in Sri Lanka

The 10-year Acquisition and Cross-Servicing Agreement (ACSA), signed by the United States and Sri Lanka on March 5, has major ramifications for the region, particularly for India, according to the Hindu March 9. ACSA will provide for logistics, supplies, and re-fuelling capabilities,, among other facilities. These represent additional U.S. capabilities in the Indian Ocean, New Delhi admitted.

Despite all the sophistry and "spin" by the Americans, ACSA is a military deal, and for the United States, it is as good as acquiring a naval base in the Indian Ocean (it already has a military base at Diego Garcia). What also has been noted by the Indian analysts is the silence of the Manmohan Singh government. In the immediate context, ACSA means the Sri Lankan government will get full American support in its fight against the Tamil Tigers, among other benefits. A few years ago, such an agreement would have been inconceivable, New Delhi analysts pointed out, because of India's active opposition.

It is also evident that the United States is eager to set up many such naval bases in the Indian Ocean, Arabian Sea, and South China Sea. Recently, a U.S. Navy warship, the USS Gary, a guided-missile frigate with 200 officers and crew, docked at Sihanoukville, 115 miles southwest of Cambodia's capital, Phnom Penh. The Gary is the first American naval vessel to dock in Cambodia in more than three decades. Although Cambodia has not signed on to the ACSA agreement, or agreed to a full-fledged U.S. Naval base, the United States has improved its relations with Cambodia, and has offered once more to start military assistance, which stopped in 1997.

Musharraf: 'Iran Should Not Be a Target'

Inaugurating a two-day conference at the National Defence University at Islamabad, Pakistani President Pervez Musharraf made clear that, "Iran should not be a target," according to the Daily Times March 7. He said: "If any attack against Iran is launched, we will have to face a lot of problems," adding that Islamabad is making efforts to avoid such a development. Musharraf said if Iran were attacked, it could trigger further sectarian problems in the Muslim world and a host of other nations.

It is likely that what Musharraf is referring to is the increasing pressure on Pakistan, exerted by U.S. Vice President Dick Cheney and his cabal, to cooperate with the United States against Iran. Talking to Geo TV, former ISI chief and trainer of the Taliban in the 1990s, Gul said the recent Cheney visit was aimed at pressuring Pakistan, "as the United States would need Pakistan's support and Balochistan land to attack Iran." He also said that, "it may be the possibility that the Pakistani government is refusing the United States permission to use its land."

According to reports, Cheney made clear to Musharraf that Washington and NATO are set to move into Pakistan's tribal agencies bordering Afghanistan to take on thousands of al-Qaeda and other non-Pakistani and non-Afghan militants lodged there.

State Department Drug Report Praises Iran and Myanmar

Anne Paterson, Assistant Secretary of State for International Narcotics and Law Enforcement Affairs, commenting on the State Department's annual report on the global drug crisis, said Iran was "playing a very positive role," the Bangkok Post reported March 2. "They have been very active along the border of Afghanistan," Paterson added, although noting that Iran is still a "major transit route for opiates from Afghanistan." On Myanmar, she said that opium production continues to fall, and that the amphetamines coming out of Myanmar come from the rebel groups who are fighting the military government.

China To Establish Fund for Overseas Investment

China is planning to place $200 billion of its $1 trillion in foreign currency in a fund for investment overseas, according to a report in Asia Times last month. The Finance Ministry will issue 1.5 trillion yuan of bonds, pulling excess liquidity out of the economy, and "buy" the $200 billion in dollars from the foreign reserves. The dollars will go into a new company called the National Foreign Exchange Investment Co., to be run by Lou Jiwei, the current vice minister of finance, all under the State Council.

One reason for the move is the devaluation of the dollar, since the value in dollars of the Chinese reserves falls by $50 billion for each 5% dollar devaluation against the yuan.

Wen: China Must Increase Economic, Energy Efficiency

China must urgently increase its economic and energy efficiency and reduce its huge trade surplus, Prime Minister Wen Jiabao emphasized in his report to the opening session of the National People's Congress in Beijing March 5. While Wen's speech is being reported as calling for the "greening" of China, what he actually said was that the national economy must meet its goal of reducing energy consumption per unit GDP. While that is a very bad economic measure, the underlying issue is that underdeveloped economies, like those of China or India, squander a lot more energy than more developed ones, due to inefficient production methods. The issue of pollution in China, like in other developing countries, is also an urgent one, because more primitive industry, dependence on coal, and other effects of backwardness generate real problems like poisoned water systems, air, and so forth.

At the same time, there is a lot of fuss being made over climate change, biofuels, and so on, at least in the Chinese media. What Wen did not do, was emphasize the really urgent need, to develop nuclear energy and other advanced technologies much faster than China already plans to do, although China recently did make a breakthrough in fusion energy development (see below).

China had only minimally reduced its relative energy consumption in 2006, Wen said, and major pollution increased, and this must "resolutely" be changed. "Lots of outdated production facilities are still in operation," he said, despite national legislation.

Wen also called for reducing the speed of economic growth to 8% from 10.7%. "The most important task for us is to promote sound and fast economic growth," Wen said. "We need to greatly improve the quality and efficiency of economic growth."

China Completes Thermonuclear Fusion Reactor

China has completed construction of a thermonuclear fusion reactor, the Chinese Academy of Sciences (CAS) announced March 1. This is the Experimental Advanced Super-Conducting Tokamak (EAST), an upgrade of China's first-generation Tokamak device and the first of its kind in operation in the world, said the CAS reported. The EAST is the cheapest and most quickly built of current fusion devices, and the first to go into operation. There are some 2,000 Chinese researchers now working on thermonuclear fusion. They succeeded in generating an electrical current of 250 kilo amperes in five seconds.

China also made agreements with the French Areva company to build two nuclear reactors in southeastern China Xinhua reported March 5. In addition, Westinghouse Electric will build two other reactors in Shandong Province. Areva and Westinghouse are competing to build as many as 26 more reactors in China by 2020. China plans to import uranium from Australia, Canada, South Africa, and Kazakhstan.

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