Asia News Digest
China Rep Defends East Asian Cooperation Talks
Speaking at a Sasakawa Peace Foundation forum at Carnegie Endowment in Washington, D.C. Dec. 7, Dr. Zhang Yunling, who is also the Director of the Institute of Asia-Pacific Studies at the Chinese Academy of Social Sciences, said that the motion towards an East Asian Community is now irreversible. While the Asian nations want to engage with the U.S. in the process, "we will not give in to U.S. opposition," as happened after the 1997-98 crisis, when the U.S. stopped efforts to form an Asian Monetary System. "We learned from the crisis of 1997-98 that the responses from the international institutions were wrong, and they have admitted that they were wrong," Zhang said. "Nor can we depend on them in the future. Therefore, we must have some arrangement within Asia."
He said neither Japan nor China, for different reasons, can be the "leader" of this community of interestJapan because of the history of World War II, and China "because some in the U.S. think we aspire to being too powerful." Nonetheless, he said the Plus3 (Japan/China/Korea) look at the French/German alliance as a model to study, if not copy, and noted that the meeting of the leaders of these three nations after the Chiang Mai Initiative (which was a cover of EIR at the time) was a truly historic development, which is now institutionalized.
Briefed on Lyndon LaRouche's view of the dollar collapse as systemic, the disaster of either buying or not buying the U.S. debt, and the necessity of a global solution, Zhang ducked the global issue, but responded that "it is mainstream opinion in China that we must restructure our reservesbut very carefully."
Privately, Zhang said that no one is publicly thinking about using the new EAC clout to push for a new global systemthat they are hoping that the U.S. is recovering.
Chinese Leadership Sets Policy for 2005
China's leadership held their three-day Central Economic Work conference to set policy for the "very crucial" year 2005. This is the last year of the 10th Five-Year Plan (2001-2005). Key issues discussed at the Dec. 3-5 conference, were continuing the national "macro-economic control policy," "handling the relationship between the market mechanism and macro-control," and to "safeguard social stability," according to the People's Daily of Dec. 6. China is facing severe crunches in infrastructure, especially energy and transport, problems exacerbated by rising oil prices, and very serious pollution, due to inefficient industry. The huge income gap between the fast-growing east coast and China's 900 million farmers is also a big national problem.
The government will also focus on developing the agricultural sector and better income for farmers. Much more efficient use of energy and natural resources, and energy-saving, are also top priorities.
All nine members of the Standing Committee of the Political Bureau of the Communist Party of China (CPC) Central Committee attended, and were addressed by President Hu Jintao and Prime Minister Wen Jiabao. Statements released after the meeting said China will focus "on the quality and efficiency of economic growth."
China Faces Worst Energy Shortages Since Late 1980s
A report by the National Reform and Development Commission released in early December revealed that in the first ten months of 2004, China has imported almost 100 million tons of crude oil, and will end up importing almost 40% of its oil this year. The report calls for limiting gas consumption of automobiles, and discouraging use of private cars in big cities, in favor of buses, subways and bicycles, and more efficient central heating systems for all new housing.
However, China will continue to be dependent on coal, now the source of two-thirds of all its energy consumption. Coal-fired electricity plants will become more efficient, and the extremely wasteful smaller coal mines will be closed. (These are also extremely dangerous, as demonstrated by the repeated deadly accidents in China's coal mines.)
Shanghai, Beijing at Risk from 'Hot Money' Real Estate
Chinese media have reported that property prices, especially for villas, are rising too fast, because of speculating foreign investors. The Beijing Business Today said in late November, that overseas investors are going into Chinese real estate in expectation of a revaluation of China's renminbi/yuan, and claimed that some $1 billion in hot foreign money has gone into the Shanghai property market since the People's Bank of China raised interest rates on Oct. 28. Foreign investors have to get their mortgages at foreign banks in China, which were not affected by the interest rate rise. Real estate prices have continued to rise in China after the interest rate increase. National statistics show that housing prices rose 11.7% year on year in the first 10 months of 2004, to 2,758 yuan ($333.09) per square meter.
Mei Xinyu, of the Chinese Academy of International Trade and Economic Co-operation (CAITEC), said that speculative capital can enter China via false exports and fake foreign loans, and said that China's trade surplus shot up to $7.1 billion in October, after reaching only $3.93 billion in the first nine months of 2004. This could indicate hot money inflows, Mei said. He also warned that China's interest rates, which are higher than the U.S. could attract speculators.
Andy Xie, Morgan Stanley's chief economist for Asia-Pacific, warned of a potential disaster, if speculative funds currently invested in Chinese real estate market are used to buy renminbi.
South Korean President on Tour Against Military Action
President Roh Moo-Hyun is on a worldwide tour to deliver the message that Seoul will not go along with any military action in Korea. Speaking in Warsaw Dec. 5, Roh said the first concern is "the Korean people's safety and prosperity. No one can pursue only nuclear dismantlement at the cost of leaving the Korean Peninsula torn into pieces." Roh toured Ibero-America and Southeast Asia in late November, and three European countries the week of Dec. 1st.
Lyndon LaRouche said last week that Bush "may not be able to find North Korea on a map, but he intends to bomb it, nonetheless," illusions of peace proposals to the contrary.
Part of that message appears to have gotten through to Roh. In London Dec. 2, Roh said that "no country can enforce an option unacceptable to the South Korean people to resolve North Korea's nuclear issue. The South Korean nation deserves to have a voice in these matters and will exercise its right to do so. In fact, an observation of history will show that the resort to force or forceful means has always generated considerable fall-out and this in turn has led to yet more problems in its wake," he said.
In Paris Dec. 6, Roh said that North Korea is arming itself because "the United States thinks the Kim Jong-il regime will collapse in the end," and so is not negotiating in good faithas Pyongyang has charged for a year.
He said that China and South Korea "do not want a North Korean regime change," and "the countries that do" will have to take action to cool things down and "narrow the gap."
India Warns Rumsfeld Against Arm Sales to Pakistan
Indian Foreign Ministry spokesman Navtej Sarna said Dec. 9, after U.S. Defense Secretary Rumsfeld's meeting with External Affairs Minister Natwar Singh, that "Concern was expressed from our side about the repercussions from the arms supplies on the ongoing India-Pakistan peace process, currently poised at a sensitive juncture. India-U.S. relations have seen a significant transformation during [President Bush's] first term. These arms sales would impact on the positive sentiment and goodwill for the United States in India."
The U.S. wants to sell Pakistan eight P3C surveillance planes, anti-tank missiles and other arms.
Indian External Affairs Minister Singh said in Parliament that the "government will not hesitate ... to ensure that our defense preparedness is not compromised in any way."
East Timor President Gives Lesson on Treaty of Westphalia
Speaking in Washington Dec. 7, East Timor President Xanana Gusmao was challenged by the Amnesty International's spokesman on why he has refused to support the "international community's" demand for a tribunal against the Indonesian military, regarding the violence after the independence vote in August 1999. Gusmao said, in paraphrase: I stated in 2001, and I repeat today, a tribunal is not my priority. If you are to hold a tribunal, don't put it on us. We have a fight for justice, but we see the need for justice in feeding our people, in convincing those who fled or disagreed with us about independence from Indonesia that they can come back and live in peace. We see our Indonesian friends across the border, and we say "hello, you can return." We travel to Jakarta, and say "the past is the past, let us live as neighbors in harmony."
Australia Offered Special Forces to Thailand
Australian Foreign Minister Alexander Downer made an offer of broad assistance to Thailand's Foreign Minister, Dr. Surakiart Sathirathai, including possible deployment of Australian special forces or military advisors to counter what the Howard government worries could lead to the establishment of radical terrorist base in southern Thailand, which could serve as a base for the terror group Jemaah Islamiyah (JI), and a staging post for attacks on Australia or Australians abroad.
In an interview with the Asian Wall Street Journal, Foreign Minister Downer said the insurgency in Thailand was not started by JI, but had "the potential to be mercilessly exploited by JI." Downer warned that more people had been killed by terrorists in Thailand than in the Bali bombing in October 2002. "We've said to the Thais that we would be happy to provide them with some assistance. I made that offer to the foreign minister," Downer said.
While more than 500 people have been killed in southern Thailand in 2004, Downer betrays an ignorance of the roots of liberation movements in southern Thailand, which were once part of a separate state. A spokesman for Downer was more circumspect about what type of assistance Thailand could request, and said nothing was in the works.
Thai Intel Reports U.S., Israel Operating in South
According to the Bangkok Post of Dec. 5, a source within a Thai intelligence agency said U.S. and Israeli spies have been watching Muslim instigators in the three southern border provinces of Yala, Pattani, and Narathiwat and had warned Thai authorities to prepare for violence, including suicide bombers. "The U.S. and Israeli intelligence agencies are paying attention to violent Muslim movements in southern Thailand and checking if they have connections with al-Qaeda and Jemaah Islamiyah terrorist groups," the source said.
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