The Screaming Pen

Providing Global Insight, Context, and Perspective

Classic Pen: An Awkward Two-Step

A Beginner’s Guide to the World’s Most Important Relationship

“Which is best chemistry graduate school in England? Who is your favorite NBA player? How many centimeter are you?” Launched rapid fire by the throngs of residents that swallow any native speaker brave enough to wander into one of China’s many “English corners” – plazas and parks where Chinese meet to practice speaking the language on Saturday nights – the questions begin to take on the air of a personal press conference. Any lone Westerner at one of these can expect a similarly exhilarating evening, replete with overly eager late-20’s gentlemen popping into view randomly, making googly-faces from behind the rows of questioners for effect. Indeed, the curiosity and friendliness greeted foreigners here is hard to imagine for outsiders who rarely think of China without the menacing C-word directly preceding.

As the world’s largest and most visible Communist country this is perhaps inevitable. Much U.S. press coverage of China relates to textile quotas, exchange rate policy, and corporate takeovers; complicated issues more easily made exoteric by portraying the country as hostile, red, and monolithic. Avian bird flu, tense relations with Taiwan and Japan, human rights, and an intense military build-up are no less frightening.


Remembering her Conjunctions, and with Plenty of Questions for You

This misunderstanding by no means runs only one way. The xenophobic atmosphere that festered in China during the 1960’s and 70’s persists still, marooned by intellectual debates firmly quashed in public, on-line, and in the classroom. Problems with the U.S. media there may be, but American news organizations provide reporting less fettered by direct state control and censorship. Indeed, Chinese perceptions of America are influenced more heavily by the professional basketball player Dwayne Wade and the television sitcom Friends – wildly popular in Shanghai and Beijing– than through the cycle of accurate reporting, solid analysis, and measured reflection.

A fundamental misconception underlying common foreign discussion of China, but lacking in reality however, is that a massive reservoir of pent-up ill will exists towards America. In fact, many Chinese still proffer the old saying that they “dislike the government, but like the people” of America; a statement now obsolete in many parts of the world that abhor both. Widespread membership in the Communist Party primarily serves cadre’s bureaucratic and individual career objectives rather than zealous anti-capitalist indoctrination. And soldiers’ marching drills in Tiananmen Square are today largely equitable to those at Arlington National Cemetery. Scare-mongering photos of such are better left to tabloid articles covering North Korea.

Policy-makers on both sides have to move past these stereotypes if they are to successfully manage China’s emergence on the regional and national stage. Washington’s principals must also recognize that while Joseph Nye’s “soft power” is ubiquitous throughout the mainland and its peasants and laborers have plenty of bread and butter grievances, they’re hardly clamoring for a democratic revolution. President Hu and company rightly take serious America’s tough talk – a real-politic tendency regulated by its superpower status in a rocky unipolar world – but need to understand that an adversarial relationship is not the intended result, but the concern.

The necessity of maintaining peace is consequently pressed upon by Beijing’s legitimately unnerving actions: an exponential increase in military spending with no obvious military threat; bellicosity towards Taiwan and Japan; and political cover and economic assistance for unsavory regimes from Central Asia to Africa to Latin America. How leaders are able to deal with these issues will likely determine the answer to another question frequently posed at China’s English Corners: “Will there be peace between America and China?”

– DML

 2006. All rights reserved.

September 30, 2006 Posted by | Author: DML, China, Country Profiles, International Relations, United States | Leave a comment

Classic Pen: The New Amsterdam

Minorities Crime & Drugs in China

The meanest bowl of la mian – steaming sweet noodles and meat that renew life on a frosty winter evening – you’ll ever find will be in a Uighur restaurant. Fortunately for survival, the dish can be found for 40 cents in noodle stalls located in neighborhoods throughout China. Less auspiciously for Chinese authorities, the widespread presence of ethnic minorities is, combined with the drug trade, making domestic control increasingly harder to maintain.

People from the Xinjiang (the place) Uighur (the people) Autonomous Region, China’s most western province, are noticeably different-looking than the ethnic Han that make up around 95% of the nation’s population. On average, the Uighurs are taller, with sharper features and lighter eyes. They appear more like Central Asians as they are indeed from that corner of the world. Unlike the officially atheistic Chinese, they are Muslim and wear a doppa, or Uighur hat.


Visine: Gets the Red Out

Uighurs are overwhelmingly a friendly, hospitable, and decent people. As is inherent in human nature, however, a small minority exists with less savory motives and the will to resist. They also have legitimate grievances: Xinjiang was only really pulled into Beijing’s orbit in the 1950’s when the People’s Army arrived. In a successful effort to prevent independence – similar to that witnessed in former Soviet states with similar histories in Central Asia – China has been moving its citizens to the province by the millions in an effort to pacify the Uighurs through demography and breeding; the Han now make up 50% of Xinjiang’s population. Furthermore, widespread human rights abuses and the absence of choice in the political arena lead to increasing frustration and unrest among Uighurs. Beijing’s solidarity with America’s war on terror is frequently thought to stem from domestic desires in Xinjiang. Remember the screeching woman on the White House lawn during Chinese President Hu Jintao’s speech in April? She was Uighur, and never would’ve been heard in China.

Yet as long as the central government possesses a monopoly on force restive groups find it virtually impossible to challenge its rule directly. Instead, dissent will undermine the state through other outlets. With little stake in a system that discriminates against them, some minorities seek profit through street crime and drug smuggling. Noodle stalls and niu rou (meat stick) vendors often sell hasheesh alongside their edibles. During 2005 they became even bolder, approaching shaggy-looking foreigners on Shanghai’s main tourish promenade. They also sustain a healthy trade in stolen goods, lifting cell phones and wallets, and push imitation Marlboros.

An Unhappy Bunch

The Uighurs are not the only groups in China with varying loyalties: Tibet has long been a high-profile cause celebre, and the people in Southern China – Guangdong and Hong Kong – don’t consider themselves Chinese because they aren’t Han and don’t speak Mandarin, but Cantonese. Economic dynamism has led to relative calm from Hong Kongers who were more than a little uneasy when the People’s Army arrived as the British pulled out in 1997. And while they have very different aspirations and live under widely divergent conditions than the Uighurs, they are increasingly pushy about their freedoms. Mongolian, Laotian, and Burmese groups also call the PRC home.

Definitely Worth the Trip

Nationalities from far beyond Asia are developing a presence in the country as well. In May, in conjunction with the United States, China seized 300 pounds of cocaine from a Colombian narco-gang with local partners in Hong Kong and mainland China.

Even more disturbingly, less than a mile from Zhongnanhai – the Chinese leadership’s central headquarters in Beijing- lies Sanlitun Rd and its shady cousin, Sanlitun South. The former is a dull stretch of karaoke bars with awful beer that guidebooks tout as having the best nightlife around. Just a few blocks away, hidden on all sides by apartment blocks, emerges an expatriate college student’s dream: a dusty dirt road where animals roam freely, lined by tiny alleys with wild-west bars that stay open all night serving Coronas for 50 cents. Indeed, the latter looks more like Mexico than what you’d expect to find in the heart of the Chinese capital. Less benignly are the Nigerian lookouts that man each end of the street offering everything from marijuana to crack to the passerby.

In a country that places a premium on prying into both its own citizens’ and foreigners’ lives, combined with the blatant visibility of the practice, one wonders how it can exist without the authorities’ complicity. This is doubly so given that the Nigerians are legally in China on student visas. How they got the visas is not so difficult to discern: Nigeria is a significant source of Chinese oil imports, and thus the necessary immigration papers get filed rather quickly. Yet the opacity of the government means that its role in the drug trade – whether through tacit approval and taxation or active facilitation – cannot be ruled out. Do high-ups have knowledge of it? Could it be that the Colombian drug bust accomplished two tasks at the same time: cracking down on a rival gang without connections while showing America’s Drug Enforcement Agency that it’s a good-faith partner in the War on Drugs?

If so, not only is it grossly illegal and disingenuous but illogical. Both petty and violent crime are on the rise in China, and figures will continue to climb in the future. China’s leaders should be careful about the short-term profits they seek from the trade, as the networks it creates will undermine their authority and prove impossible to stamp out. Politically, the communist party exerts a firm hold on power, but increasing revolts – numbering 87,000 last year according to party reports – will lead to a day, unlikely to be soon, when this changes. When it does the Uighurs, Tibetans, Cantonese and others will hardly help slow its fall.

August 26, 2006 Posted by | Asia, Business, China, Emerging Markets, War on Drugs | 1 Comment

Classic Pen: On Prose and Politics

VIA MEDIA
We shall not cease from exploration
And the end of all our exploring
Will be to arrive where we started
And know the place for the first time.

T.S. Eliot, The Four Quarters

Of the events of the 1930’s leading up to the Second World War, no other event inspired young ideologues more than the Spanish Civil War. Young Intellectuals enlisted in droves to fight on both sides, including the writers Ernest Hemingway and George Orwell. The socialist backed International Brigade, funded in part by the Soviet Union, allied with Spanish Republicans in an attempt to defeat the Spanish fascists led by General Francisco Franco in a war that served as a precursor to the war that by 1940 engulfed most of Europe.

A portrait of the artist as a young man

Nancy Clare Cunard, a left wing intellectual living in Paris at the time, sent out a questionnaire to two-hundred writers living in Europe. She posed the following question: “Are you for or against the government of the Republican government of Spain? Are you for, or against, Franco and Fascism? For it is impossible any longer to take no side.” The Anglo-American poet T.S. Eliot responded with a “neutral”, leading to the assumption by Cunard and others that he was either politically ignorant or sympathetic to the fascists. This was not true, however, as he was a believer in “via media” or the “middle way”, a belief that moderation is the only stance that takes into account the shortcomings of human nature. During a debate between T.S. Eliot, a fascist writer, and a communist writer, T.S. Eliot mentioned the following:

“Fascism and communism, as ideas, seem to me to be thoroughly sterilized. A revolutionary idea is one which requires a reorganization of the mind; fascism and communism is now the natural idea for the thoughtless person. This in itself is a hint that the two doctrines are merely variations of the same doctrine: and even that they are merely variations of the present state of things…. What I find in both fascism and communism is a combination of statements with unexamined enthusiasms.”

Eliot believed that these “unexamined enthusiasms” led to irrational decisions during a time when rational thought was completely necessary.

This example of moderation is still relevant today, as we are faced with an increasingly polarized nation where sides are being taken and decisions are being made, sometimes irrationally. It is always important to take a step back and objectively examine issues in context. At thescreamingpen.com we attempt to place news events in context, while providing non-partisan analysis and perspective.

-JPL

August 22, 2006 Posted by | Author: JPL, Business, China, Energy, Europe, Financial Markets, Flat Tax, Uncategorized | Leave a comment

Wired for Truth

Guest Author KPC Explains Why China’s Internet Censorship Is Proving Futile

As angry students filled the streets during the Tiananmen uprising of 1989, Communist Party officials clamored to restrict the use of photocopiers. They argued the contraptions would allow dissidents to disseminate anti-government propaganda. While a lot has changed in the interceding years—and copyphobia now seems almost charming—China’s cadres are no less adamant about neutralizing today’s technological threats to their authority. These days, Internet search engines and Web logs have become the party’s new public enemies.


The Propaganda Ministry Plays Whack-a-Mole

China is known to employ some of the most sophisticated censorship technology in the world. Authorities wield controls so precise banning mere phrases is as effortless as blocking entire Web sites. With nearly 111 million Chinese online, the government’s official stance is that it aims to protect its citizens from “dangerous” or “unhealthy” content, such as pornography. But upon closer inspection, the government has as much contempt for search results on topics including democracy, human rights, Taiwan and Tibet.

An exhaustive search for any of these terms is practically impossible using China’s beloved Baidu or other search engines complicit with Chinese censorship law. Perform a search for “Tiananmen” and you are more likely to find tourist information than potentially embarrassing historical text, a fact that has angered human rights activists worldwide.

Recently, major Western service providers have also become embroiled in the censorship controversy. In May, human rights advocacy group Amnesty International issued a stern rebuke against Google and Yahoo!, among others, for colluding with the Chinese government. Google took a public relations beating after it launched its censored version, Google.cn, and Yahoo! has come under fire for allegedly helping government officials identify Chinese journalist Shi Tao after he sent an e-mail abroad exposing China’s media restrictions. The outing of Shi landed him a 10-year prison term. Shi is one of many who have received harsh punishment for accessing or disseminating politically sensitive materials online.

China has gone to great lengths to control the flow of information on the Web. While it has focused much of its attention on search engines, government officials are equally determined to snuff out subversive Web logs or blogs. The free-flowing nature of this Internet venue makes it easy for users to spread information quickly and cost effectively, which is precisely the reason President Hu Jintao announced a crackdown on these forums in late June.

China’s assault on blogs has been threefold: utilize the same censorship controls that have been effective against search engines, issue “admittance standards,” and arrest anyone posting subversive material as a means of reprisal and intimidation. Hu has his work cut out for him. According to a study by Beijing’s Tsinghua University, China has 37 million blogs. That number is expected to nearly double by the end of the year.

What does the future hold?

For now, China is winning a slew of censorship battles, but Hu and his cronies will likely lose the war. If China is to conquer the Web, it must overcome a series of obstacles arising from an increasing number of Internet users, internal and external political pressure, and technological loopholes allowing users to bypass online censorship.

Hu endorses the Internet as an invaluable tool for business and education, and recognizes that the Net is essential if China wishes to complete with other nations. Since the Internet is here to stay, the number of Chinese who have access to its search engines, blogs and e-mail accounts will only grow with time, making it increasingly difficult for authorities to control the flow of information.

While many have decried Google and Yahoo’s cooperation with Chinese officials, some good may come from the controversy. The international community is now more aware of China’s censorship policies thanks to these high-profile cases, and activists around the world have renewed their determination to end Internet restrictions. This external political pressure is coupled with that of dissidents living within China. The Chinese masses will undoubtedly continue to flex their political muscles online despite restrictions and jail time.

Perhaps the most encouraging phenomenon is the appearance of home-grown service providers that enable the Chinese to bypass government controls. Beijing-based Maxthon routs traffic through a Web proxy, which creates a loophole allowing users access to restricted sites. Although the company downplays this functionality, word of the shortcut has spread from internet café to college dormitory, causing an explosion in the service’s popularity. In time, the party may get wise and shut Maxthon down, but there will be no shortage of loopholes.

The Communist regime may ultimately discover that censoring the Web is as futile as restricting the use of photocopiers. These counterrevolutionary machines now reside in nearly every office building, bank, school and supply shop in Beijing, and offer copies to anyone capable of pressing a button.

-KPC

July 14, 2006 Posted by | Asia, Censorship, China, Globalisation | Leave a comment

Herodotus Wouldn’t be Pleased

The policy of a state lies in its geography.
– Napoleon

Political scientists bicker constantly over the factors most influential to international affairs. Economics, race, force, power, globalization, culture, religion, and others are frequently mooted, yet there is at least one dimension routinely given short-shrift: geography. So fundamental is the field that it’s routinely overlooked, especially when viewed from an America that misses local fault lines in its broad, global sweep of the world, and which is fortuitously largely free of geographical conflicts itself. Other places aren’t so lucky. Here’s a survey of how geography affects three selected political and social issues around the world:


For Pete’s Sake Herodotus, Stop Making Maps of Far-Away Lands & Put On Some Clothes!

Turkey & the European Union. Turkey has been working towards admission to the EU since the 1960’s, and is now closer than ever to entry. Yet the path to membership is still far from certain, due mainly to obstreperousness from France, the Netherlands and others. The debate hinges on many angles – the nature of Turkey’s government and society, Islam, disparities in GDP per capita, and more – but one assertion routinely voiced has to do with geography: dissenters point out that most of Turkey in fact lies not in Europe, but in Asia. Divided from Europe by the Bosporus and the Sea of Marmara, Turkey does indeed touch Syria, Iraq and Iran. But the protesters’ claim is disingenuous and belied by the fact that Cyprus (the Greek half at least) – just off the coasts of Syria, Lebanon, and Israel – is an EU country that lies further from Europe than does Turkey. Geographers aren’t pleased that their trade is a guise for prejudice and insecurity.

The Shanghai Cooperation Organization. The SCO was founded in 2001 by six nations – China, Russia, Kazahkstan, Tajikistan, Uzbekistan, and Kyrgystan – and was based initially on the “Treaty of Deepening Military Trust in Border Regions” and the “Treaty on Reduction of Military Forces in Border Regions,” and now includes political, economic, cultural, and security cooperation. The group’s six members are officially “equal partners” but the locus of the group is clearly China. As China’s neighbors to the South and East are warier of the country’s hemorrhaging might, Beijing is looking towards Central Asia to build regional security hub. And only a cursory knowledge of the SCO’s member governments is needed to know that they are wicked. The Screaming Pen is losing sleep in a bad way that will only be remedied through a post in the near future.


Kurds: Cutting a Wide Swath

Kurdistan. If you’ve never heard of Kurdistan, it’s probably because it doesn’t exist; at least as a state that is. Despite numbering some 25 million, Kurdish people make up the largest ethnic group anywhere without a country. Kurdistan, however, is the term used to refer to areas dominated by Kurds, and which includes northern Iraq, southeast Turkey, northeastern Syria, and northeast Iran. An unfortunate product of haphazard colonial-era boundary-making, Kurdistan was dissected and abused by governments in faraway capitals, and – with the exception of in Iraq now – still is. In fact, the Kurdish issue is supreme in Turkey’s discussions with America over Iraq, and Turkey’s troops prey along the mountains between the two countries searching intently for Kurdish rebels.

A simple perusing of maps often confirms or explains global events and always has. When the Germans sent the Zimmerman Telegram to Mexico in 1917, in an effort to cause trouble for the United States in its own backyard, it was pure geopolitics. So next time you want to know who’s spooning with who, make sure you’ve got a good atlas on hand.

Note: The Perry-Castaneda Library Map Collection at the University of Texas, Austin, has the most comprehensive collection of maps on the internet, and is the source of most Screaming Pen plots. And in case you were wondering, Herodotus is often considered the father of history and was the maker of some of the world’s earliest maps.

– DML

 2006. All rights reserved.

June 25, 2006 Posted by | Asia, China, Europe, European Union, International Relations, Kurdistan, SCO, Turkey, Uncategorized | Leave a comment

The New Amsterdam?

Minorities Crime & Drugs in China

The meanest bowl of la mian – steaming sweet noodles and meat that renew life on a frosty winter evening – you’ll ever find will be in a Uighur restaurant. Fortunately for survival, the dish can be found for 40 cents in noodle stalls located in neighborhoods throughout China. Less auspiciously for Chinese authorities, the widespread presence of ethnic minorities is, combined with the drug trade, making domestic control increasingly harder to maintain.

People from the Xinjiang (the place) Uighur (the people) Autonomous Region, China’s most western province, are noticeably different-looking than the ethnic Han that make up around 95% of the nation’s population. On average, the Uighurs are taller, with sharper features and lighter eyes. They appear more like Central Asians as they are indeed from that corner of the world. Unlike the officially atheistic Chinese, they are Muslim and wear a doppa, or Uighur hat.


Visine: Gets the Red Out

Uighurs are overwhelmingly a friendly, hospitable, and decent people. As is inherent in human nature, however, a small minority exists with less savory motives and the will to resist. They also have legitimate grievances: Xinjiang was only really pulled into Beijing’s orbit in the 1950’s when the People’s Army arrived. In a successful effort to prevent independence – similar to that witnessed in former Soviet states with similar histories in Central Asia – China has been moving its citizens to the province by the millions in an effort to pacify the Uighurs through demography and breeding; the Han now make up 50% of Xinjiang’s population. Furthermore, widespread human rights abuses and the absence of choice in the political arena lead to increasing frustration and unrest among Uighurs. Beijing’s solidarity with America’s war on terror is frequently thought to stem from domestic desires in Xinjiang. Remember the screeching woman on the White House lawn during Chinese President Hu Jintao’s speech in April? She was Uighur, and never would’ve been heard in China.

Yet as long as the central government possesses a monopoly on force restive groups find it virtually impossible to challenge its rule directly. Instead, dissent will undermine the state through other outlets. With little stake in a system that discriminates against them, some minorities seek profit through street crime and drug smuggling. Noodle stalls and niu rou (meat stick) vendors often sell hasheesh alongside their edibles. During 2005 they became even bolder, approaching shaggy-looking foreigners on Shanghai’s main tourish promenade. They also sustain a healthy trade in stolen goods, lifting cell phones and wallets, and push imitation Marlboros.

An Unhappy Bunch

The Uighurs are not the only groups in China with varying loyalties: Tibet has long been a high-profile cause celebre, and the people in Southern China – Guangdong and Hong Kong – don’t consider themselves Chinese because they aren’t Han and don’t speak Mandarin, but Cantonese. Economic dynamism has led to relative calm from Hong Kongers who were more than a little uneasy when the People’s Army arrived as the British pulled out in 1997. And while they have very different aspirations and live under widely divergent conditions than the Uighurs, they are increasingly pushy about their freedoms. Mongolian, Laotian, and Burmese groups also call the PRC home.

Definitely Worth the Trip

Nationalities from far beyond Asia are developing a presence in the country as well. In May, in conjunction with the United States, China seized 300 pounds of cocaine from a Colombian narco-gang with local partners in Hong Kong and mainland China.

Even more disturbingly, less than a mile from Zhongnanhai – the Chinese leadership’s central headquarters in Beijing- lies Sanlitun Rd and its shady cousin, Sanlitun South. The former is a dull stretch of karaoke bars with awful beer that guidebooks tout as having the best nightlife around. Just a few blocks away, hidden on all sides by apartment blocks, emerges an expatriate college student’s dream: a dusty dirt road where animals roam freely, lined by tiny alleys with wild-west bars that stay open all night serving Coronas for 50 cents. Indeed, the latter looks more like Mexico than what you’d expect to find in the heart of the Chinese capital. Less benignly are the Nigerian lookouts that man each end of the street offering everything from marijuana to crack to the passerby.

In a country that places a premium on prying into both its own citizens’ and foreigners’ lives, combined with the blatant visibility of the practice, one wonders how it can exist without the authorities’ complicity. This is doubly so given that the Nigerians are legally in China on student visas. How they got the visas is not so difficult to discern: Nigeria is a significant source of Chinese oil imports, and thus the necessary immigration papers get filed rather quickly. Yet the opacity of the government means that its role in the drug trade – whether through tacit approval and taxation or active facilitation – cannot be ruled out. Do high-ups have knowledge of it? Could it be that the Colombian drug bust accomplished two tasks at the same time: cracking down on a rival gang without connections while showing America’s Drug Enforcement Agency that it’s a good-faith partner in the War on Drugs?

If so, not only is it grossly illegal and disingenuous but illogical. Both petty and violent crime are on the rise in China, and figures will continue to climb in the future. China’s leaders should be careful about the short-term profits they seek from the trade, as the networks it creates will undermine their authority and prove impossible to stamp out. Politically, the communist party exerts a firm hold on power, but increasing revolts – numbering 87,000 last year according to party reports – will lead to a day, unlikely to be soon, when this changes. When it does the Uighurs, Tibetans, Cantonese and others will hardly help slow its fall.

June 17, 2006 Posted by | Asia, Author: DML, China, Corruption, Country Profiles, Crime, Human Rights, Nigeria, War on Drugs | 2 Comments

Jenga!

How Instability in Pakistan could Create a Perilous Proxy War

With the death of Abu Musab al-Zarqawi yesterday in Iraq, we’re reminded that it takes just one accurately targeted missile or bomb to make life fleeting. While Zarqawi’s demise is celebrated in America and elsewhere, there are other areas of the world in which such precise targeting would cause not rejoicing but a major headache. Foremost among such places? Pakistan, and not just because of terrorists; the interests of the South Asia’s three largest powers are increasingly converging in what the Washington Post calls “the world’s most politically fragile nuclear power.”

Musharraf the Quisling

Al Qaeda and friends have tried and barely failed to knock off Pakistani President Pervez Musharraf several times. With Musharraf facilitating and aiding U.S. counter-insurgency efforts in the mountainous region along the Pakistan-Afghan border – and thus severely restricting al-Qaeda’s maneuverability – he’s mujahideen target number one. Leaflets distributed in tribal areas of Waziristan in May called for the “lions of Islam to kill the slave of Bush in Pakistan.”


Dude Needs a Chill Pill, and a sh*@l$!d of weapons

Were this to happen, the nature of a successor government looks far from set. As Musharraf himself came to power by coup d’ etat while circling Karachi in an airplane, and the general has gone on to consolidate personal control at the expense of democratic institutions, weak processes to name a successor could be easily subverted. Indeed, in a country in which only one in ten resident is favorably disposed towards America, popular sentiment might result in a noisy extremist assuming the reins of a nuclear-armed nation (thus the location of WMD must be an A-list priority for the CIA here; there have been reports of this). Nonetheless, a state of flux would emerge with foreign spy agencies forcefully vying for influence.

The Wolves Circle

And who would the meddlers be? Pakistan and Musharraf are centerpieces of America’s anti-terror strategy, and the CIA would obviously be supremely concerned with the outcome. Indeed, America has been ramping up efforts to keep Musharraf alive. India will be on the edge of its seat too. Since Britain abandoned its colonies after WWII, India and Pakistan – and Muslim separatists in Indian-controlled Kashmir – have been fighting over contested territory. India enjoys territorial advantage in the status quo, but spoilers and fanatics have prevented a formal peace and violence has spilled over, with sporadic attacks by armed-gunmen and suicide bombings in Delhi. Relations have thawed to an unprecedented degree since Indian Prime Minister Monmohan Singh took over, yet in the absence of a resolution the potential for disruption is ever-present. Moreover, both non-signatories to the Nuclear Non-Proliferation Treaty aim nuclear weapons at each other.

The third power in the region, China, is hardly a newcomer in Pakistan. Throughout the Cold War, China sought to offset hostility with India – witnessed by their 1962 border war – through friendship with Pakistan. During the 1990’s China exported weapons to the country and was vital to its acquisition of WMD. Of late, however, China has been further consolidating ties. In May, Pakistan placed an order for 150 Xiaolong fighter planes, a move that will replace the F-16 as the air force’s primary jet.


I Hear the Schools in the Neighborhood are Fantastic!

Before that, a February visit by Musharraf to Beijing saw the rapid-fire signing of 13 bilateral agreements on trade, security, and investment, which crucially included the announcement of Chinese aid in building an energy corridor through Pakistan that would supply China with imports of raw materials. China will finance the expansion of a port on the Pakistani coast at Gwadar, adding nine more berths, an approach terminal, and storage facilities. An oil and gas pipeline would then be built to ship materials from the Middle East directly to China’s western provinces, bypassing the (U.S. controlled) Malacca Straits. Never mind what this says about the domestic implications for minority and outlying areas through which the pipeline would cut – Xinjiang in China and Baluchistan in Pakistan – the external implications are clear: China-Pakistan ties are surging.

But They Sometimes Hunt in Packs

That Musharraf will go –in the near future due to assassination, bringing the return of insecurity, or later on because of time and age – is not in question. Neither is the reality that when he does, China, India, and the United States (with Iran potentially in the mix) will see their interests put to the test. Whether this engenders hostility and confrontation or cooperation is unclear; the signals, however, are not entirely inauspicious. China and India signed a border accord in April and have also just announced a $2b joint bid to develop a Kazakh oil field in an effort by the “world’s two fastest-growing major economies to avoid competing with each other,” according to the China Daily.  America and India agreed to a major nuclear deal in July last year. China and America have reached a consensus – although likely short-lived – on Iran, another rocky concern. Additionally, all three countries will be lothe to see WMD fall into terrorist hands or their economic interests threatened.

Against this backdrop, the most likely scenario is the emergence of another clique from the armed forces, commanding no popular support but receiving logistical sustenance from America, China’s tacit approval, and India’s watchful eye. This would be a stop-gap measure that leaves corrections between the people’s volition and political control for another day, yet is far better than allowing extremists assume control. Unfortunately, such has been the argument for supporting dictators everywhere for the past fifty years, always leaving the patriarch on the wrong side of history and fostering yet more grievances to be paid for in future.

– DML

 2006. All rights reserved.

June 10, 2006 Posted by | Asia, Author: DML, China, India, International Relations, Iran, Middle East, Nuclear Weapons, Oil, Pakistan, Politics, United States, WMD | 3 Comments

Chicken the China, the Chinese Chicken

A Changing Tide, the Spigot is Tightened

Since hitting an all time high on May 8, the MSCI Emerging Markets Index has fallen over 20%, as inflation fears and global monetary tightening begin to mop up the loose liquidity that has helped emerging market exchanges, along with other riskier assets, achieve strong annualized gains over the past few years.

With China experiencing staggering economic growth, one would think that the Chinese Stock Markets would have been on the winning end of a several year long emerging markets run. In fact, on June 6, 2005, while many Asian markets were continuously breaking multi-year highs, the Shenzen Compositie hit a six year low, puzzling amateur investors across the globe. Possible answers to China’s equity market conundrum can be found by taking a closer look.

The Times, they are a Shenzen

The Late Bird Gets the Sub Par Market Returns

China, a late bloomer in the Capital Markets game, did not have a stock market until 1990, and not a single Chinese company was listed abroad until 1993. As of 2003 -the latest information thescreamingpen.com could muster- over 66 million Chinese citizens participate in the domestic equity markets, with only 35 companies listed as private. It is estimated that at least two thirds of the shares listed on the Shanghai and the Shenzen, China’s two largest stock markets, are owned by the government. It is apparent that investors, especially those abroad, are hesitant to invest in companies whose balance sheets, among other things, could be compromised because of government involvement.

The Reforms of 2005

Realizing that capital inflows are essential to sustainable growth, the powers that be in China undertook some important reforms in 2005, including:

  • Public listing of the “Big Four” Chinese banks on overseas exchanges
  • Selling large stakes of domestic banks to international investors, which will result in increased capital inflows and much needed international banking expertise.
  • Reform of China’s A share market, which has resulted in 1/3 of China’s A shares being tradable.
  • The removal of capital gains taxes on securities held by foreign investors
  • The issuance of sovereign “Panda Bonds”, issued in Chinese currency.

Outlook and Conclusions

With the initiation of a global tightening cycle, it is possible that China may have missed out on the latest emerging markets rally. The good news is that China’s Eleventh Five Year Plan, which began on January 1, 2006, contains many provisions that aim to reform China’s financial sector even further. Hopefully these provisions are enacted.  This would allow China to efficiently handle foreign inflows of Capital, as well as wealth created at home.  If China continues down the road of financial sector reform, it will be a much needed step on the path to possible market maturity.

*Look for an overview of the Indian Financial sector reform in the coming days.

-JPL

Links of Interest

http://www.washingtonpost.com/wp-dyn/content/article/2006/06/08/AR2006060801493.html

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June 9, 2006 Posted by | Asia, Author: JPL, China, Chinese Stocks, Corruption, Emerging Markets, Globalisation, Investing, Politics, World Markets | 1 Comment

An Awkward Two-Step

A Beginner’s Guide to the World’s Most Important Relationship

“Which is best chemistry graduate school in England? Who is your favorite NBA player? How many centimeter are you?” Launched rapid fire by the throngs of residents that swallow any native speaker brave enough to wander into one of China’s many “English corners” – plazas and parks where Chinese meet to practice speaking the language on Saturday nights – the questions begin to take on the air of a personal press conference. Any lone Westerner at one of these can expect a similarly exhilarating evening, replete with overly eager late-20’s gentlemen popping into view randomly, making googly-faces from behind the rows of questioners for effect. Indeed, the curiosity and friendliness greeted foreigners here is hard to imagine for outsiders who rarely think of China without the menacing C-word directly preceding.

As the world’s largest and most visible Communist country this is perhaps inevitable. Much U.S. press coverage of China relates to textile quotas, exchange rate policy, and corporate takeovers; complicated issues more easily made exoteric by portraying the country as hostile, red, and monolithic. Avian bird flu, tense relations with Taiwan and Japan, human rights, and an intense military build-up are no less frightening.


Remembering her Conjunctions, and with Plenty of Questions for You

This misunderstanding by no means runs only one way. The xenophobic atmosphere that festered in China during the 1960’s and 70’s persists still, marooned by intellectual debates firmly quashed in public, on-line, and in the classroom. Problems with the U.S. media there may be, but American news organizations provide reporting less fettered by direct state control and censorship. Indeed, Chinese perceptions of America are influenced more heavily by the professional basketball player Dwayne Wade and the television sitcom Friends – wildly popular in Shanghai and Beijing– than through the cycle of accurate reporting, solid analysis, and measured reflection.

A fundamental misconception underlying common foreign discussion of China, but lacking in reality however, is that a massive reservoir of pent-up ill will exists towards America. In fact, many Chinese still proffer the old saying that they “dislike the government, but like the people” of America; a statement now obsolete in many parts of the world that abhor both. Widespread membership in the Communist Party primarily serves cadre’s bureaucratic and individual career objectives rather than zealous anti-capitalist indoctrination. And soldiers’ marching drills in Tiananmen Square are today largely equitable to those at Arlington National Cemetery. Scare-mongering photos of such are better left to tabloid articles covering North Korea.

Policy-makers on both sides have to move past these stereotypes if they are to successfully manage China’s emergence on the regional and national stage. Washington’s principals must also recognize that while Joseph Nye’s “soft power” is ubiquitous throughout the mainland and its peasants and laborers have plenty of bread and butter grievances, they’re hardly clamoring for a democratic revolution. President Hu and company rightly take serious America’s tough talk – a real-politic tendency regulated by its superpower status in a rocky unipolar world – but need to understand that an adversarial relationship is not the intended result, but the concern.

The necessity of maintaining peace is consequently pressed upon by Beijing’s legitimately unnerving actions: an exponential increase in military spending with no obvious military threat; bellicosity towards Taiwan and Japan; and political cover and economic assistance for unsavory regimes from Central Asia to Africa to Latin America. How leaders are able to deal with these issues will likely determine the answer to another question frequently posed at China’s English Corners: “Will there be peace between America and China?”

– DML

 2006. All rights reserved.

June 6, 2006 Posted by | Asia, China, Country Profiles, International Relations, Politics, The Media, United States | Leave a comment

This is Chess not Checkers That’s a Warning Shot

The Deadly Paradox of the Big Six’s Iranian Accord

It’s hard to suppress feelings of glee upon reading the headline “Six World Powers Agree on Iran.” This is the exact foundation that any diplomatic solution to the Iranian quandary must be based upon: a united international alliance providing Iran with a choice between carrots if it agrees to halt uranium enrichment and sticks if it doesn’t. A common diplomatic front brings the world one step closer to the chance for a peaceful solution; however, if the chance proves illusory it will also bring the world one step closer to war.

In the run up to Iraq in 2003, there were many arguments against the U.S. invasion, many of which could be reasonably discounted at the time. War is an extreme last resort, but the argument that it should never be used is flawed: when squared off against a murderous dictator conflict can become justifiable. Nor was U.S. belligerence a stand alone sound argument. Despite bellicose rhetoric from George Bush, Saddam Hussein had violated 18 U.N. resolutions and was sidestepping weapons inspectors. The most valid pre-war argument against going to war: that the Bush administration hadn’t exhausted all diplomatic options.


It’s your Turn, Khameini. Whatcha Gonna Tell ’em ya Big Bearded Fella?

The Diplomacy this Time

The Bush administration seems to have painfully learned how to go about building its case without alienating virtually every non-holder of an American passport. It first relied on negotiations led by the “European 3” – Britain, France, and Germany – during which Iran acquiesced to halting enrichment for a time. But Iran knew that the European trio’s silent partner held the key to the only concession vital to its survival: security. So Iran once again began work on its centrifuges.

Steadily advancing its nuclear know-how, Iran’s fiery president Mahmoud Ahmadinejad recently sent an 18-page letter to George Bush, which was touted as being the first direct communication between the two nations since the 1979 hostage crisis. Accustomed to years of frosty, static relations, Secretary Rice made a knee-jerk announcement that the letter suggested nothing new, and perhaps it didn’t. Then just this week Iran called for direct talks with America, which in the absence of a U.S. response gave Iran the impression of being patient and reasonable. So until the United States replied to these overtures – no matter the political or public relations intentions behind them – Iran would appear to be holding out the olive branch. America had to respond.

With the six-party agreement on Iran it did, and with perfect timing to boot. Iran will be presented with a package of incentives in return for a “verifiable” halt to its enrichment activities. If it continues to pursue nuclear weapons further Security Council action could follow. Clearly, Iran has to make the next move, and crucially, America will appear to have dutifully followed a diplomatic approach supported by the Security Council nations.

This appears to be good news for advocates of multilateralism and supporters of a peaceful, diplomatic solution. It’s good news for those who wanted Europe to face up to legitimate security threats, which due to pride and matters of the heart it could not with Iraq. And it’s good news for those who want to see more than obstructionism and the unbridled pursuit of resources from Russia and China.

The Ball’s in Their Court

Thus, the question now becomes, “What will Iran do?” The preferred choice is for it to accept the incentives offered and abandon its desire for nuclear weapons (merely nuclear energy, it says). This is possible but would likely only come in the form of a comprehensive strategic agreement leaving Iran assured of its own security. Observers should also note that the Iranian issue is not confined to uranium enrichment: Iran plays a powerful role in neighboring Iraq, has long supported insurgents in Lebanon, Palestine, and elsewhere; and exercises more power than many realize. It recently won backing for its nuclear program from Indonesia, and China and Russia usually provide solid political cover. These will have to be addressed.

The true test of the “Big Six’s” solidarity will come if Iran decides to balk: will the world support increasingly tough sanctions, or will views diverge? Governments around the world – now realizing that true threats must be confronted – may be more likely to follow, because they too have played an active diplomatic role this time round. Despite this, these countries’ citizens will have seen Iraq and the gruesomeness of war and are likely to feel much the same as they did before Iraq.

Will Iran stall, varying negotiations with concealment? Probably. This much is true, however: until now, with a dire situation in Iraq and virulent anti-Americanism everywhere, talk of military action against Iran seemed distant. Yet now, if diplomacy is given a fair chance and fails nonetheless, Iranian rejectionism will leave us on the precipice of Iraq redux. And this time – no matter the political logic beforehand– military action would be no more likely to create a stable or friendly or democratic country out of Iran than Iraq.

– DML

 2006. All rights reserved.

Note: The Iranian situation is highly fluid at present, with half a dozen diplomatic developments and announcements (see links below) being made in the past few days alone. Contrast this with the lack of bilateral contact that existed for the past 27 years between the two countries. As stated above, this will either lead to a breakthrough or a serious deepening of the standoff. Keep watching.

U.S. Offers to Join European Three in Talks with Iran
Iran Welcomes Talks, Rejects U.S. Conditions
Iran Considers Offer from Big Six
Washington Post Analysis

June 2, 2006 Posted by | Asia, Author: DML, China, Europe, France, Germany, International Relations, Iran, Iraq, Middle East, Nuclear Weapons, Oil, Palestine, Politics, Russia, United States, WMD | Leave a comment