'China Will Surpass U.S. as India's Largest Trade Partner'

May 21 (EIRNS)—Trade between India and China is growing rapidly and will reach the 2010 target of $40 billion by next year, and Beijing is likely to surpass Washington as New Delhi's largest trading partner soon, said Chinese Ambassador to New Delhi Sun Yuxi. "We can easily surpass the target of $40 billion before 2010. It's possible to reach this target next year," the Chinese envoy said in New Delhi on May 21, at a seminar organized by the Confederation of Indian Industry (CII) to explore economic opportunities in Jiangsu region of China. India and China had set the $40 billion target during Chinese President Hu Jintao's visit to India in November last year.

Dispelling the impression that India and China are rivals, the envoy stressed that the economies of both countries are growing at a fast rate and therefore their partnership is set to grow in the future. "If we become full partners, we will lead the world in business spheres," he said.

"We could reach $50 billion by 2010. Some are even suggesting bilateral trade could be around $80 billion by 2010," said Ambassador Sun. "India-China trade is growing at the rate of 40% per year. It will exceed $30 billion this year. If trade continues to grow at this rate, China will overtake the U.S. to become India's largest trading partner," the envoy added.

New Delhi Makes Its Move to Contain Housing Bubble

May 21 (EIRNS)—In a move to help arrest excessive flow of capital into the real estate sector, the Manmohan Singh government in India has tightened the external commercial borrowing (ECB) that Indian entrepreneurs were allowed for developing integrated townships. Previously, foreign borrowing was not allowed in general real estate development, but only to developing integrated townships. There was evidence that the externally borrowed money was moving into the real estate, however, hiking housing prices in and around major cities. A lot of industrial revenue has also speculating in the burgeoning housing bubble.

New Delhi's rationale for taking this measure was to curb inflation and slow down the rise of the Indian currency, rupee, against major foreign currencies. The rupee is the fourth-largest gainer against dollar in 2007. As New Delhi has made India's GDP growth increasingly dependent on exports, a higher value for the rupee poses a problem for the gurus of High Growth Rate.

Pakistan Neglects Agriculture, Finds Poverty on the Rise

May 23 (EIRNS)—Despite Pakistan's contribution to the Bush Administration's war on terror, and the reward of about $12 billion in cancellation of debt by the United States and the Paris Club of donors, for being an ally in the U.S.-U.K. "war on terror," Pakistan's poverty is on the rise in the rural areas, according to a World Bank report. Over the past decade, the document said, poverty has increased in the countryside, while declining in urban areas.

About one-third of total households in the country were considered below the poverty line, whereas poverty levels in rural areas remained close to 39%. Beside the fact that many in Pakistan claim that a large number of families, considered as above the poverty line, are in reality extremely poor, the World Bank document says that Islamabad made little effort to alleviate poverty during this period.

The reason that Pakistan's poverty level is growing in rural areas, is that Islamabad has ignored the vast agricultural sector and focussed on utilizing skilled and educated manpower to generate GDP growth. This policy is prompted by the authorities' promotion of globalization and economic liberalization, the same way these policies were promoted in China and India.

If this policy continues, Pakistan may face some serious economic problems in the coming years. According to the World Bank document, Pakistan's population, now about 153 million, will reach 217 million by 2020 and will double by 2040.

Disturbances in India's Punjab ... Once Again

May 23 (EIRNS)—The movement in Punjab that took a heavy toll in human and economic terms in the 1980s, including the life of at least one Indian Prime Minister, Shrimati Indira Gandhi, is once again at the center of disturbances. On May 21, in that northern state which is considered the "granary" of India, anger spilled out into the streets; businesses, schools, and markets closed as thousands of Sikhs obeyed a call by their religious leaders to strike, in protest against a sect they accuse of sacrilege. While many marching Sikhs chanted hymns and recited scriptures, some protesters burned effigies of the sect leader, Gurmeet Ram Raheem Singh. Lawyers in many cities decided to stay away from courts.

What the leading English news daily, The Hindu, editorialized as "The Rising Tide of Hate," has its genesis in last year's State Assembly elections. At the time, Gurmeet Ram Raheem Singh's sect, known as Dera Sacha Sauda (DSS), was used by the Congress Party to undermine the mainstream Sikh political party, Shiromani Akali Dal (SAD). Following the SAD's strong election victory, tensions mounted between the DSS and the Singh Sahibs—who claim Vatican-like authority over the Sikh community's religious and temporal affairs. The confrontation intensified when the DSS founder appeared in an advertisement dressed like the tenth, and last, Sikh Guru, Guru Govind Singh, early this month.

Punjab had gone through bloody carnage in the early 1980s when another Sikh heretic, now dead, Jarnail Singh Bhindranwale, thundered in 1984: "I finish only those who are enemies of the Sikh faith like policemen, government officials, and Hindus." That launched the violent Khalistani movement, demanding separation of Punjab from India. The violence only abated in 1992.

Once again, pro-Khalistan slogans are being raised as the Singh Sahibs demanded "severe action" against the DSS. Fearing assaults by vigilantes, sect members have started fleeing the town of Bhatinda. Given the string of recent violent attacks on Deras, their fears appear well founded.

Punjab's SAD-led government has been strikingly selective in its concern for the law. No action has been taken against protestors who raised pro-Khalistan slogans and made death threats. What is happening in Punjab is not exceptional. Besieged by egalitarian ideologies and cultural change, Hindu, Muslim, and Sikh conservatives are all seeking to combat modernity by inflaming religious passions, The Hindu pointed out in its editorial on May 22.

Korea's Leading Presidential Candidate Unveils Grand Canal Scheme for North and South Korea

May 21 (EIRNS)—Lee Myung-bak, a member of the South Korean opposition Grand National Party, who holds a lead in public polls of about 40% for the December Presidential elections, unveiled on May 20 the blueprint of his core election pledge: a cross-national waterway connecting South Korea with North Korea.

Dubbed the Pan-Korea Grand Waterway, it will be 3,100 kilometers long and comprise 17 routes, including five in the North. The longest canal will be Gyeongbu Canal or Seoul-Busan Canal, which will link the Han River in Seoul to the Nakdong River in the southeastern port city of Busan.

Lee's group said that Korea must consider not only the economic advantages of the waterway, such as cheaper transport and relieving clogged roads, but that the project will "open our hearts," according to the Korean Herald.

This announcement follows last week's successful testing of two rail connections between North and South Korea, further laying the basis for ending the official state of war (left over from the 1950s Korean War), and preparing for eventual reunification.

Lee was the CEO of Hyundai Construction and Engineering before entering politics in 1992. As Seoul mayor in 2005, he restored the dried up Cheonggye Stream in the center of the capital city, an achievement which helped his bid for the Presidency.

In a related development, a North Korean cargo ship docked in Busan, on the southern tip of South Korea, the first such maritime cargo exchange between the two Koreas in over 50 years. The ship will make three round trips per month.

Thai Video-Game Fanatic Guns Down Seven in Market

May 24 (EIRNS)—The death count from violent video-game addicts is mounting in Asia. Yesterday, Kiartipong Meksawat, 21, took an AK-47 assault rifle into a market, killing three and injured seven, before being killed by police.

The leading Bangkok daily The Nation described Kiartipong as a gun enthusiast who "loved to play violent video games, read 'Guns and Ammo' magazines, and had no friends except his sister."

Police searched his apartment and found two fully loaded AK47 magazines, 35 rounds of bullets for .22mm handguns, three knives, one samurai sword, ninja-style throwing stars, weapon magazines, and violent computer games.

Chinese Company Links Up With Blackstone Group Hedge Fund

May 21 (EIRNS)—China's new foreign exchange investment company has agreed to put $3 billion into the Blackstone Group hedge fund, Xinhua reported today. The China Jianyin Investment Ltd, which is still not formally founded, released a joint press statement with Blackstone May 20 on the deal. Wang Jianxi, chairman of China Jianyin, said they will buy an under-10% non-voting stake in Blackstone, at the same time that Blackstone launches its $4 billion IPO in mid-June.

The worst part of this move is giving backing to the voracious hedge funds. The amount is a small part of China's huge $1.2 trillion in forex reserves, the biggest in the world. IMF Managing Director Rodrigo de Rato said at a G8 Finance Ministers meeting on May 19, that he is not concerned that this means any real move by China away from the U.S. dollar and U.S. Treasury bonds, where the biggest part of its foreign exchange has been invested. Rato said this was a measure to "diversify their investments," and not "extraordinary." Countries with big forex reserves are particularly interested in stability in currency markets, he said.