From Volume 6, Issue 19 of EIR Online, Published May 8, 2007
Asia News Digest

India and Japan Sign Infrastructure Development Pact

May 2 (EIRNS)—The visiting Japanese Minister of Land, Infrastructure and Transport Tetsuzo Fuyushiba has signed a memo of understanding on cooperation for infrastructure development with Indian Urban Development Minister Jaipal Reddy. The agreement would provide India with Japan's technical know-how in water, sewage, environment, transport, and other issues, Fuyushiba said at a press conference in New Delhi today, Kyodo International reported.

Fuyushiba also met with Indian Railway Minister Laloo Prasad Yadav, and agreed that the Japan-backed project to build freight corridors for Delhi-Mumbai and Delhi-Kolkata routes will be a symbol of cooperation between the two countries.

The two agreed to set up a panel of experts to study works that are necessary for linking the railroads with ports, including the 1,483 kilometer (about 945 miles) Delhi-Mumbai freight corridor which will pass through six states of India, according to Fuyushiba. In a joint statement with Laloo Yadav, Fuyushiba expressed Japan's readiness for the feasibility study on the freight corridor project and said the Japan International Cooperation Agency (JICA) can submit a final report by October to launch the project, possibly in January 2008.

While the Delhi-Kolkata freight corridor project is still at a preliminary stage, the Manmohan Singh government in India has already allotted US$50 billion for the Delhi-Mumbai freight corridor project. The start-up of the project is scheduled for the end of this year.

Pakistan Offers Innovative Idea for Nuclear Reactors

May 2 (EIRNS)—Pakistan has made an innovative suggestion to the Nuclear Suppliers Group (NSG)—a group of 45 member-nations in charge of selling of all nuclear-related material and equipment—including dual-use technologies: you set up nuclear power plants in Pakistan and you can run them.

"The NSG member-countries have been told that in case of their readiness to establish nuclear reactors, only they could operate them and Pakistani scientists would do nothing with those reactors," said Pakistan's Foreign Minister Khurshid Mahmud Kasuri. He added that the NSG countries can take back the entire load of spent fuel as well.

Pakistan's offer is unique. Once upon a time, a concept of developing "nuclear parks" in foreign lands was discussed, but failed to take off due to security and other reasons. The reason the concept is being floated now, is that Pakistan, a non-signatory of the nuclear non-proliferation treaty (NPT), and a unrecognized nuclear weapons state, has been denied a deal similar to the Indo-U.S. civil nuclear agreement which is now being negotiated.

The second, and more important reason, is that Pakistan is a power-starved nation with very little coal and oil reserves. Pakistan has two nuclear plants under operation now. China has agreed to build three more nuclear plants in Pakistan, but that would not come near meeting its overall power requirements in the coming years.

U.S. Says Chinese Navy Poses a 'Strategic Shift'

May 3 (EIRNS)—Speaking in the Australian capital, Canberra, where he is visiting to commemorate the 65th anniversary of the Battle of the Coral Sea in World War II, Rear Adm. James Kelly, the commander of U.S. naval forces in Japan, said he expects that China is likely to expand its naval power in the coming years to take a more active role in securing global sea lanes vital to its burgeoning economy, news agencies reported.

Such a strategic shift would see China developing a "blue water navy" capable of projecting Chinese power well beyond its shores, Kelly added. He pointed out that the shift had become apparent last October, when a Chinese submarine surfaced near a U.S. carrier group in international waters off Japan.

"As their economy continues to grow, I suspect that China is thinking that they need to have a blue water navy to protect their interests around the globe," Kelly told reporters. "We have, in the past, maybe had more of an expectation that they would stay very close to their own territorial waters and not operate that much outside of those waters."

Of particular interest to China, he said, were sea lanes such as those that bring iron ore and natural gas from Australia, and have helped China become the world's biggest economy, after the United States and Japan. "I certainly would envision them keeping an eye on those sea lanes," Kelly said.

Indian Ministry Outlines Rail Links to China, S.E. Asia

April 29 (EIRNS)—"India is now following a policy of international corridors. In the first step, it is trying to link the railways of India and Myanmar over a distance of 330 km," a spokesman for the India Railway Ministry said, as quoted by the Press Trust of India (PTI) today. India has already launched dedicated freight corridors to link four cities, and is now joining with neighboring nations to develop global railway corridors. The India-Myanmar line "will also give us a link between India and Southeast Asian states including China. The exercise will cut traveling to one-fourth the time taken by sea route," the Rail Ministry source said.

The planned eastern international corridor will link the city of Kohima in Nagaland state to Myanmar, and to railway lines in Vietnam, Cambodia, and Laos in the South, and economically developed southeastern China and Russia on the other, PTI reported.

India is giving technical help to the railroads of Malaysia, Cambodia, Laos, and Bangladesh, to help develop their operating infrastructure and help connect interstate railways. India is also counselling Pakistan and other nations on rail links to Southwest Asia. Iran is already completing the internal rail line that will connect Iran's national rail system to Pakistan, which is already connected to the Indian rail system. Iran has announced the rail line will be completed some time in mid-2008.

China To Grow Fixed-Asset Investment by 25%

April 29 (EIRNS)—Chinese investment in fixed assets, primarily infrastructure, could grow by some 25% in 2007, the National Development and Reform Commission's Investment Research Institute senior official, Zhang Hanya, was quoted as telling a Beijing financial conference April 29. "Despite the government's strengthened controls over local projects, fixed-asset investment may continue to grow at around 25%," Zhang said. "The government wouldn't like to see investment expansion fall below 20%, and economic growth shrink to lower than 8%, such as around 1998, when the economy was slumping, and the government faced great difficulty in boosting domestic demand and easing unemployment," Zhang was quoted by Bloomberg.

Infrastructure construction and other areas of the economy that need more investment will be funded by the government, but spending will be limited elsewhere. There is more than 6 trillion yuan ($778 billion) in deposits in Chinese banks, and it has sufficient fuel, electricity, and transportation, as well as growing profits of industrial companies, to support infrastructure investment, Zhang said.

Government controls on investment in real estate and redundant projects have been tightened since last year, and the government has raised reserve requirements for commercial banks, in order to curb uncontrolled lending.

Putin Invited To South Korea To Discuss Railroad Corridor

May 3 (EIRNS)—South Korea's President Roh Moo-hyun has invited Russian President Vladimir Putin to visit Korea to discuss speeding up connection of the Russian Trans-Siberian Railway (TSR) to the Trans-Korean Railway (TKR), Donga press service quoted a senior official of the Uri political party saying May 2. "Former Prime Minister Han Myeong-sook ... delivered a personally handwritten letter from President Roh to President Putin on April 25," the official said. "Considering that the test runs of the Gyeongui and Donghae lines [the two new connections of the South Korean to the North Korean rail lines, finished in 2003] were agreed to be carried out on the 17th of [May], at the 13th Inter-Korean Economic Cooperation Talks, it can be assumed that the request was made to resolve the deadlock in business cooperation between the [Russian] TSR and [Korean] TKR."

Han also met Vladimir Yakunin, the president of the Russian Railways, and the two had an "in-depth" discussion on building the rail links from Russia through the Korean Peninsula.

This project to build the rail connection between Korea and Russia was agreed upon by former Korean President Kim Dae-jung and Putin in February 2001, but has not yet been started. Recently, progress has been made in resolving the Korean peninsula nuclear issue by the six-party talks, and, independently, the two Korean governments had to go ahead with test runs on the completed rail lines.

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