|Asia News Digest
Beijing Clings to Export Addiction
May 29 (EIRNS)The Chinese State Council announced that Beijing is going to try to save China's "world market share," and will take even more measures to support the collapsing export sector. At a May 27 meeting of the cabinet executive, led by Prime Minister Wen Jiabao, the government announced a host of measures which will, in reality, only plunge China further down the black hole of globalization. The State Council statement said that, "At present and for a certain period in the future, shrinking external demand and the resulting decrease in exports will remain our biggest difficulty for economic growth."
Yesterday in Washington, former IMF China division head Eswar Prasad admitted that the Chinese and U.S. economies are in a "death embrace." Speaking at a Brookings Institute forum, Prasad said that China "desperately needs" to export the products of its industrial "excess capacity" to someone, and since the EU and Japan are in no shape to buy them, the only hope is the U.S.which itself is "devastated."
The new measures from the State Council will include tax support, $84 billion worth of short-term export credit insurance, $10 billion worth of credit to foreign purchasers (Chinese firms have been hit not only with evaporating orders, but a sharp increase in payment defaults by U.S. and other importers.) The government will also provide financial support for smaller enterprises, and take measures to ensure that the exchange rate of the yuan is kept stable, to keep exports "competitive." The tax breaks will benefit both labor-intensive and high-tech industries, which have been losing their shirts as exports continued to collapse over the past six months.
The Chinese steel industry is also on the chopping block. Steel exports have fallen so sharply in 2009 that they could be overtaken by imports, Luo Binsheng, vice chairman of the China Iron and Steel Association (CISA), said May 25. Crude steel exports were down by 49.7% in the first four months from a year ago, to 6.97 million tons, while imports were up 10% to 6.73 million tons. Imports were bigger than exports in March and April. So far, the Chinese government has continued to subsidize the steel industry to prevent a collapse of output, according to Xu Lejiang, head of the biggest producer, Baosteel.
U.K.-based Group Blamed for Attack on Uzbek Security
May 26 (EIRNS)Uzbekistan's President Islam Karimov has blamed the Britain-headquartered and banned Wahhabite Islamic group, Hizb-ut-Tahrir (HT), for the violent confrontation the May 23-24 weekend, between the militants and the Uzbek security forces, that killed at least 47 people.
According to Uzbek Prosecutor General Rashid Kadyrov, the dead included 33 terrorists, 10 policemen, and 4 civilians. The clash in Khanabad, a major crossing point on Uzbekistan's frontier with Kyrgyzstan, located in the fertile Ferghana Valley, reportedly erupted in the early hours of May 26. A group of heavily-armed militants, numbering perhaps as many as 25, reportedly attacked the local police headquarters, the border checkpoint and besieged the local office of the State Security Service (SNB).
The militants reportedly used rocket-propelled grenades in their attack. Residents on the Kyrgyz side reported hearing a powerful explosion at about 2 a.m. It is most likely that the militants were armed members of the Islamic Movement of Uzbekistan (IMU), a terrorist group recruited exclusively from the white-robed Koran-waving HT Wahhabites funded by the Saudis. According to Gretchen Peters, author of the book Seeds of Terror, IMU, founded in the Ferghana Valley, became partners with the Taliban in the heroin trade back in the late 1990s.
Peters claims the IMU carries heroin from Afghanistan through Tajikistan into Russia. Some observers see a likely link between the Khanabad firefight and the anti-Taliban offensive being carried out in Pakistan. After getting tits start in Uzbekistan, Tajikistan, and Kyrgyzstan in the early 2000s, IMU, along with other Central Asian militants, drifted to safe havens in Pakistan's tribal areas. Now those Pakistani sanctuaries are becoming less secure. Pakistani troops have pressed an offensive in the Swat Valley that has pushed the Taliban back on their heels, and there is a widespread expectation that the government will soon expand its security sweep in the terrorist-infested region of Waziristan.
Under increasing pressure in Pakistan, Central Asian militants may be opting to return home, reviving the idea of fomenting an insurgency in Central Asia.
U.S. To Broaden Anti-Opium Campaign in Afghanistan's Helmand Province
May 28 (EIRNS)Following a highly successful military operation in Marja in Helmand province, U.S. troops are gearing up to concentrate efforts in the province, which produced almost 57% of Afghanistan's 7,700 tons of opium last year. The Marja operation helped to destroy 92 tons of opium and dislodge the Taliban from that area. According to an unnamed U.S. military official, the raid in Marja is the best that can be done at this time, because too few forces are available to secure all of the territory in southern Afghanistan.
"Until the additional troops are available, search and destroy operations like the one in Marja, are the best we can do," the officer said. "The operation succeeded in its limited objective, and that command center needed to be taken out, but we won't make serious headway in the South until we can hold the ground in places like Marja."
This Summer, the U.S. will send an additional 17,000 troops to help stabilize the deteriorating security situation in Afghanistan. More than 8,000 Marines and 9,000 soldiers will be deployed, mostly to the eastern and southern provinces, where the Taliban control wide swaths of territory.
The fighting in Helmand is expected to intensify as the 2nd Marine Expeditionary Brigade deploy there; they will also be operating in neighboring Farah province. The Marines have established two bases, Camp Dwyer and Camp Leatherneck, to support operations in the south.
North Korea Threatens Strikes; Disavows Armistice
May 27 (EIRNS)Asian tensions continued to rise as North Korea indicated that "the Korean People's Army will not be bound to the [1953 Korean War] Armistice Agreement any longer," and threatened to launch military strikes against South Korea if any of its ships were stopped or searched as part of South Korea's adherence to the Proliferation Security Initiative (PSI).
The PSI, which was set up in 2003 by then U.S. UN representative, John Bolton, is a naval agreement that promotes the searching of ships at sea for "banned weapons of mass destruction" in order to prevent nuclear proliferation. Up until North Korea's nuclear test, South Korea had expressed agreement with the goals of the PSI, but had not become a full member.
South Korean military authorities believe there is a possibility that incidents could occur near the Northern Limit Line (NLL) in the West Sea. The NLL, drawn up at the end of the 1950-53 Korean War, has served as the de facto inter-Korean sea border. Two bloody naval battles between North and South occurred in the area in 1999 and 2002.
The South Korean newspaper Chosun Ilbo] reported that American spy satellites had detected plumes of steam and other signs of activity at a North Korean plant that reprocesses spent nuclear fuel to make weapons-grade plutonium.
In a partial step-back from the provocative rhetoric that has marked the response to the North Korean test, South Korean President Lee Myung Bak ordered his government to take "calm" measures on the threats, his office said in a statement today. Japan's Chief Cabinet Secretary, Takeo Kawamura, echoed those remarks, and called on North Korea to "refrain from taking actions that would elevate tensions in Asia."
The Singapore Straits Times editorialized that "the world has to face up to the inescapable conclusion that North Korea's nuclear-state status is all but certified. The world just has to get used to itor deal with it."