In this issue:

HSBC Buying Up Financial Assets in China

Violence Escalates as NATO Pledges More Troops to Afghanistan

Pak Finance Minister To Become Prime Minister

China Promotes 'Panchsheel'-Style National Sovereignty

EU Offers Surprising Concession to ASEAN on Myanmar

China Still Opposes India, Pakistan Nuclear Status

U.S. Delivers 30 Helicopters to Thailand

Thailand Backs UN Lead on Myanmar

A Season of Danger for Pakistani Politicians

UN Demands Access to Afghan Detainees in U.S. Custody

Gloria Arroyo's Frantic Inauguration

From Volume 3, Issue Number 27 of Electronic Intelligence Weekly, Published July 6, 2004
Asia News Digest

HSBC Buying Up Financial Assets in China

HSBC (formerly Hong Kong Shanghai Banking Corp.) has reportedly agreed to buy up 20% stake in the Shanghai-based Bank of Communications, one of China's 10 largest banks. The stake would be worth an estimated $1 billion, and would represent the largest foreign investment in a Chinese domestic bank. As well, HSBC owns a portion of Ping An, China's largest life insurance company, which according to BBC, has a market share of just under one-quarter of China's life insurance business.

Violence Escalates as NATO Pledges More Troops to Afghanistan

Sixteen Afghans who were registered to vote, two female electoral workers and two U.S. Marines, were killed by anti-Kabul, anti-U.S. militants over a two-day period (June 26-27). The escalation of violence has been attributed to the 26-nation NATO 17th Summit that began in Turkey on June 28. Prior to the summit, NATO Secretary General Jaap de Hoop Schaffer told newsmen that NATO would send 10,000 more troops during the Presidential and parliamentary elections in September, or early October. However, because of the French intervention, the number of troops NATO would send to help the Afghan elections were brought down to 3,000. As of now, about 5,500 troops are under NATO command, while almost 20,000 U.S troops are under the U.S. command.

Pak Finance Minister To Become Prime Minister

Pakistan's Finance Minister Shaukat Aziz is slated to be the next Prime Minister of Pakistan. The stopgap Prime Minister, Choudhury Shujaat Hussein has been sworn in to replace Zafaraullah Khan Jamali, who resigned on June 25. Shujaat Hussein will remain as Prime Minister for approximately two months.

Shaukat Aziz, a U.S. citizen, could not be named Prime Minister now because he is not an elected member in Pakistan's National Assembly (NA)—the Parliament. Shaukat Aziz is one of the vice presidents of Citicorp and he his on leave from his American employer, but Pakistani law demands that the Prime Minister must be an elected member of the NA. On June 30, two elected NA members—one from Sindh and another from Punjab—chose to step down to make room for Shaukat Aziz to contest from these seats. Shaukat Aziz is expected to contest both the seats.

By naming Shaukat Aziz, a foreign citizen, President Musharraf did not bend any rule. Earlier, in the 1990s, Moeen Qureshi, an IMF executive vice president and an American citizen, was flown in from Singapore to take charge of Pakistan as Prime Minister. Subsequently, Moeen Qureshi made some adjustments in Pakistan's fiscal policies that temporarily satisfied the IMF. But, he departed quickly within a year due to his failing health.

Besides being a handmaiden of the Wall Street crowd, Shaukat Aziz is also close to the Saudis, and is an urbane anti-fundamentalist.

China Promotes 'Panchsheel'-Style National Sovereignty

China is using the 50th anniversary of Panchsheel for a big diplomatic initiative to emphasize this state-centered worldview, and as part of a "systematic effort ... to rebut the theory of the 'China threat'," wrote leading Indian foreign policy analyst C. Raja Mohan in The Hindu on June 28. The commemoration is "an occasion to underline China's new approach to international relations," Mohan wrote.

"The Panchsheel, in essence, is a state-centric view of the world, and India continues to share this Chinese emphasis on state sovereignty," Raja Mohan wrote. China now recognizes "that it must end its silence in the current vigorous international debate between Europe and America on how to structure the post-Cold War global order. Emphasizing an independent foreign policy, China has until now largely kept itself out of this debate on unilateralism versus multilateralism.... While it opposes the unilateralism of the Bush administration, China is not enamoured with the European view on multilateralism. China has no desire to degrade the notion of sovereignty and accept European calls for a supranational and interventionist UN."

Beijing also wants to "debunk" the theory that China's rise to power will destabilize Asia and the rest of the world, its leaders are emphasizing that the "peaceful rise of China" will benefit all in Asia. While China and India must finalize their boundary dispute, their words "will have no meaning if they cannot expand their own cooperation. To be credible on Panchsheel, India and China need to open up the Trans-Himalayan regions to each other to create shared prosperity. To get there they should rework the trade, cultural, and consular provisions of the 1954 Agreement on Tibet to suit the new political and economic circumstances."

EU Offers Surprising Concession to ASEAN on Myanmar

The past two ASEM (Asia-Europe Meeting) conferences were cancelled when the EU refused to allow Myanmar to attend, and ASEAN refused to allow the new EU members to join without also accepting all the ASEAN members, including Myanmar, according to an article posted in the Singapore Straits Times on June 29. European Union External Relations Minister Chris Patten dropped a bombshell by stating that the continuing problems with human rights in Myanmar "should not prevent our Asian partners from benefitting from regular dialogue through ASEM with all 25 countries of the now enlarged EU, and it must not be allowed to dampen our relationship with the whole region. We are ready to negotiate deeper bilateral relations with any state that so wishes."

The offer to work toward relations with Myanmar is heralded across the region, as the Asian Regional Forum (ARF—a security forum attended by Asians, Europeans and Americans) begins a meeting in Indonesia. If the EU carries through, and Myanmar is receptive, the U.S. will be isolated in its total rejection of dealings with Myanmar. Both the House and the Senate have voted to renew sanctions on Myanmar in recent weeks.

China Still Opposes India, Pakistan Nuclear Status

China remains unfavorable to granting India and Pakistan status as nuclear powers, Assistant Foreign Minister Shen Guofeng said in Beijing on June 29 to Indian press visiting China. "The international community should stick to the spirit and principles enshrined in the Nuclear Non-Proliferation Treaty (NPT)," he said. Shen responded similarly when asked about the Chinese reaction to the recent proposal of Indian External Affairs Minister K. Natwar Singh, that India, Pakistan, and China should have a "common nuclear doctrine."

"On principle, we oppose the proliferation of nuclear weapons. Our consistent position is for a comprehensive ban and thorough destruction of nuclear weapons. The NPT and as well as the UNSC resolution 1172 should be our guiding principle," Shen said.

However, Shen also said that China and India "can help promote a stable and consistent development in other areas," even if there is delay in finding a mutually acceptable solution to the still-contested Chinese-Indian border. "Even if our border issues are not completely settled, we are still enjoying development in our bilateral relations," Shen said.

U.S. Delivers 30 Helicopters to Thailand

The U.S. delivered 30 helicopters to Thailand, for use in its efforts to end the conflict in southern Thailand and to fight drug trafficking. U.S. Ambassador Darryl N. Johnson announced delivery of the helicopters at the Royal Thai Army Aviation Center in lopburi province June 29. The helicopters, plus spare parts and training are part of a $30 million deal signed in 2001.

Thailand Backs UN Lead on Myanmar

Thai Foreign Minister Surakiart Sathirathai has proposed that Myanmar should get "firm but discrete" support from ASEAN, to ensure that ASEAN retains its credibility. Surakiart has played a key role in bilateral talks with Myanmar, and has dismissed calls by regional civic groups for the suspension or expulsion of Myanmar from ASEAN.

Thailand had proposed an additional paragraph to be included in the ASEAN communique at the end of June 30 meeting of foreign ministers, stating that the role of the UN Secretary General's special envoy, Razali Ismail, and the Bangkok Process should be supported.

Subsequently, the UN Special Envoy conveyed to Thailand that the second Bangkok Process should try to attract more participants who could provide incentives for Myanmar to move toward economic and political development. he also said the second Bangkok Process should go ahead despite the possible absence of Myanmar.

A Season of Danger for Pakistani Politicians

Unidentified gunmen sprayed bullets at the car of Pir Binyamin Rizvi, a former provincial governor and of the Pakistan Muslim League (Nawaz), killing him and two others in Lahore in the province of Punjab on June 26. The previous week, Munnawar Suhrawardy of the Pakistan People's Party, and a close associate of former Prime Minister Benazir Bhutto, was killed in a similar style in Karachi. Rizvi was coming out of his party office when gunmen, armed with AK47s, fired on his car.

The killing of these politicians may not have any serious impact on the Musharraf government. But killing of politicians, when adopted as a policy to eliminate potential political rivals, is a very serious matter. It is evident that the Musharraf government is not too keen to find out who was behind these political assassinations.

Nonetheless, there are three suspects. First, the Islamic radicals who have little love for these "worthless" mainstream politicians. Second, the Pakistani Army and supporters of President Musharraf's rule. One of the easiest ways to extend military rule is to eliminate some politicians and spread the fear of death among the living ones. The third suspect is the sectarian Shi'a-Sunni-Ahmediya killers.

UN Demands Access to Afghan Detainees in U.S. Custody

Noting serious alarm raised about the detention conditions of Afghan prisoners, on June 25, three dozen UN officials called for UN access to those people who have been "arrested, detained, or tried on grounds of alleged terrorism or other violations in Iraq, Afghanistan, the Guantanamo [Cuba] military base, and elsewhere." In Afghanistan, the Pentagon has only recently admitted that there exist 19 more detention centers, beyond the Bagram Air base near Kabul. The International Committee for Red Cross (ICRC) has an access to the Bagram Air base, but in no other detention center in Afghanistan. A number of human rights groups have recently issued a document about the "American Gulag" in Afghanistan.

Gloria Arroyo's Frantic Inauguration

For the first time in the Philippines' history, the President was sworn in, not in the nation's capital Manila, but in the central Visayas, specifically in Cebu City, whose citizens delivered her 1.2 million votes in the hotly contested elections. Supreme Court Justice Hilario Davide, himself a Cebuano, was ecstatic to swear in Gloria Arroyo-Macapagal.

While President Arroyo was being inaugurated in the Cebu City, Manila remained under a security regime. The Armed Forces of the Philippines (AFP) have deployed tanks and heavy artillery in Metro Manila indefinitely. Military spokesman Lt. Col. Daniel Lucero announced on June 30 that this state of red alert will remain even after Arroyo's inauguration, as a "precaution." The only incident reported during the day was the firing of one rifle-propelled grenade into a car dealer's showroom in Quezon City.

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