Best of the Research
The South China Sea is in focus this week as tensions rise between China and Philippines, making this report from the International Crisis Group a particularly timely read. The report seeks to explain China’s inconsistent approach to dealing with South China Sea territorial issues, and raises some interesting points. It argues that there’s a lack of coordination between government agencies dealing with the South China Sea, and says the fact that many of these agencies lack foreign policy experience is also problematic. Nationalist sentiment also reduces opportunities for calm and conciliatory approaches.
“It is likely that Beijing also sees benefit in ambiguity, which allows it to maintain room for future maneuvering. As a leading Chinese scholar summed up: ‘To keep our claim vague is to allow us more flexibility and save our face.’Unsurprisingly, Beijing has yet to assign the National People’s Congress, the highest law-making body, the issue of the nine-dashed line’s legal interpretation.”
Read the full report here.
China Power
As the scandal surrounding fallen political star Bo Xilai rages on, Chongqing has pledged better protection for foreigners in the city, despite it already generally being considered a safe place for expats. One man who probably doesn’t need to worry about the reception he’ll get from locals is Turner Sparks. The People’s Daily reports the American CEO of Mister Softee China has turned more than a few heads recently driving his ice cream truck around Suzhou.
A more familiar name to most readers will be James Cameron, the director of Titanic and Avatar. Cameron announced this week that he’s interested in filming a 3D movie in China. But will he have to toe the party line? Speaking of lines (the nine dash type, at least), the South China Sea has been the sign of further tensions, with the joint U.S.-Philippine military exercises drawing condemnation from Beijing. Indeed, China warned the United States in unusually harsh terms that outright conflict could result.
The Philippines isn’t, of course, the only country jostling with China over the vast expanse of water. China released 21 Vietnamese fishermen after securing a promise from them not to infringe on China’s territorial waters – language that's sure to draw a tough response from Hanoi. Unsurprisingly, China’s official Xinhua News Agency writes that China will defend its territory in the stand-off with the Philippines. And it doesn’t look like all talk – China and Russia launched joint military exercises in the Yellow Sea this week, evidently as a show of strength.
But while Beijing may be happy to flaunt its ties with Moscow this week, it is a little more coy about those with another neighbor – North Korea. It’s still unclear what role if any that China played in assisting North Korea with its missile program. But the issue is likely to have come up in high level talks between the two this week. Chinese President Hu Jintao urged the country to “seek peace” this week, but State Councilor Dai Bingguo still declared that China has full confidence in North Korean leader Kim Jong-un. Double game anyone?
Indian Decade
A group of women in India from the Muslim Bohra sect have banded together to campaign against female circumcision. The procedure, termed “Khatna,” is enshrined in the sect’s doctrine, despite the fact that no other Muslim sect in India practices now. Meanwhile, in a victory for human rights activists, India has just seen the first example of a child marriage being annulled. It’s a landmark case that challenges the culture of child weddings in India.
It’s also been a good week for business in India, despite some rumblings to the contrary. The state of Gujarat has reported strong economic growth as carmaker Ford builds a $1 billion plant there, joining Hyundai and Tata Motors in the state. How many of those cars will be yellow? The Akshaya Tritiya festival this week boosted sales of gold – yellow is considered lucky during the festival. If yellow is the color, tea is the drink – especially now that India has decided to declare tea its national drink. Aside from being the most popular beverage across the country, Indians also remember the tea planter Maniram Dewan, who is celebrated for starting the 1857 mutiny against the British.
With an eye overseas, Indian MPs called for reconciliation and power sharing measures in Sri Lanka to achieve peace. And after a six-month investigation, India has dropped charges of conspiracy against the Karmapa Lama. The Karmapa Lama is recognized by both the Dalai Lama and the Chinese government, and is likely to be one of the lamas that fill the political void when the Dalai Lama dies. (Compiled by Calvin Wong, Editorial Assistant).
Guns
North Korea has grabbed the headlines again with its threat to turn the South Korean leadership to ashes within minutes. But a South Korean sailor made headlines, too, after being promoted for being the first to detect North Korea’s rocket launch this week, after 45 seconds. Perhaps he should have received his medal for managing to detect the rocket before it crashed – 90 seconds after it launched.
Australian sailors are being put to another use – intercepting asylum seekers. The Sydney Morning Herald reports that HMAS Glenelg intercepted a boat carrying 164 asylum seekers northwest of Christmas Island on Sunday. But there were also some more traditional duties for Australia’s military, with the Australian Defense Force saying this week that an annual joint operation with the Indonesian Navy off the coast of northern Australia is improving maritime security.
It’s good to see Indonesia’s military playing nicely with another country. Perhaps better than it does with its own police force. The Jakarta Globe reported that the Indonesian military and police personnel signed a peace agreement during a reconciliation ceremony after clashes between the two rival groups in Sulawesi Province left eight people wounded.
Butter
The slower Chinese economy has hit the bottom line of Western manufacturers. A government economist thinks that China will bottom out in the second quarter; a growing bad debt problem could derail that prediction. Australia is increasingly a two-speed economy, with a commodities boom driving the Aussie dollar up 44 percent in three years, wreaking havoc on the manufacturing, retail, and tourism sectors. This helps explain why the developed world’s best-performing economy has seen consumer confidence drop in seven of the last nine months, prompting calls for rate cuts.
Tajikistan and Uzbekistan appear to have resolved a spat over gas supplies. The Uzbek economy has benefited from booming demand for its natural gas. The Philippines could grow 4.5 percent this year, says UBS. As in Australia, New Zealand exporters are struggling with the elevated value of their currency. Porsche and other luxury car makers are opening showrooms in Inner Mongolia, where mining is booming.
India and Japan will be holding their first economic dialog in New Delhi on Monday, following the signing of a free trade pact last year. The talks will also encompass defense and energy issues. In Tokyo, meanwhile, the Bank of Japan took another step towards monetization of Japan’s debt, announcing Friday a 10 trillion yen expansion in its purchases of JGBs. This floods the economy with cash, but with few viable investments in a shrinking market, much of the money ends up being used to purchase more JGBs…(Compiled by James Pach, Publisher)