2008 – The Year of China?

Will 2008 be the year that China takes the throne as global top dog? According to The Independent, that’s exactly what China has in mind for the coming 12-months:

China is set to make 2008 the year it asserts its status as a global colossus by flexing frightening economic muscle on international markets, enjoying unprecedented levels of domestic consumption and showcasing itself to a watching world with a glittering £20bn Olympic Games.

Once regarded at best as a sporting also-ran, China is widely tipped to top the medals table in the Beijing Olympics in August, an event in which the country’s leadership is investing huge importance and prestige.

This month, for the first time, China’s state-controlled banks will begin spending some of its $1.33trn (£670bn) in foreign currency reserves on London’s financial markets. Beijing has ruled that Britain should become only the second destination after Hong Kong to be allowed to receive investors’ money via so-called “sovereign funds” – the huge state-controlled surpluses built up by cash-rich economies from Qatar to South Korea.

The talk in the finance houses is that the label “Made in China” will soon be replaced by one reading “Owned by China”. Takeover speculation has provoked concern in some quarters at the wisdom of selling large assets to organs of a democratically unaccountable state where the financial sector remains underdeveloped.

China’s trade surplus with the rest of the world will widen from £130bn in 2007 to £145bn this year as it tries to tame its burgeoning economy amid pressure from Washington and Brussels to narrow the trade gap and raise its currency’s value.

But while some may question Beijing’s political motives, there is no doubt that China has arrived as serious power-broker. Last year, it surpassed America as the greatest driver of global economic demand. It is also widely predicted to overtake Germany as the world’s third largest economy this year.

From global warming to Darfur and North Korea, the views of Beijing and its willingness to act have become prerequisites to any solution to the world’s most pressing problems.

Let’s bear in mind that the West largely drove China’s economic ascendancy. We invested our wealth into growing their economy to extract short term gain from lower wages and relaxed or often non-existent regulatory demands. We did this full well knowing we were growing the economy of a totalitarian state which could wield enormous political control over its economic expansion unimagined in democracies. It’s been greed driving our betrayal of our own nations. The rentier class seeking maximized investment income at the expense of their countries and countrymen all the way down to the working class seeking to offset income stagnation by buying Chinese goods that line the shelves of mega-store retailers. We baited the hook and now find ourselves thrashing about at the end of the line. Remarkable.

 

It’s Not Just China’s Toys or Its Water or Its Air That’s Poisonous

China may be poised to become the world’s biggest economy but it’s being hammered by environmental threats along the way. Combined, these threats may well be enough to derail China’s economic miracle.

Well known by now are China’s severe problems with water supply and quality, it’s horribly polluted air, and all the problems detected in its exports. Now, according to Spiegel Online, word is getting out about China’s poisonous food supply:

Chinese journalist Zhou Qing, a critic of the regime, unearthed political dynamite in his two-year investigation of China’s food industry. He interviewed grocers, restaurant owners, farmers and food factory managers for an exposé for which he won a prize as part of the German “Lettre Ulysses Award for the Art of Reportage” in 2006.

His book is a dark account of a ruthless food mafia that stops at nothing to maximize its profits, for example by using contraceptives to accelerate the growth of fish stocks, lengthening the shelf-life of cucumbers with highly toxic pesticide DDT, using hormones and poisoned salt in food production and putting absurd amounts of antibiotics in meat.

Zhou said uncontrolled greed had caused a food disaster of unimaginable proportions. “I can only warn you never to go in a restaurant.” The danger of food producers being taken to task for their actions is slight. Everything disappears in China’s endless bureaucracy, he said.

Zhou’s claims may sound exaggerated, but they’re borne out by recent developments. In early December the Shanghai city council slapped an export ban on products made by the Shanghai Mellin Food Company after cancer-causing substances were found in its pork products.
In July the former director of the state food and drug supervisory authority, Zheng Xiaoyu, was executed after being convicted of taking bribes to award licences for forged drugs, some of which had lethal side effects.

The children are the biggest sufferers, said Zhou. Poisoned baby food has led to severe diseases and physical deformities. Zhou writes that 200,000 to 400,000 people fall victim to poisoned food each year. A third of cancer cases, which are increasing at double-digit rates, can be attributed to food, he writes.

“Ordinary people don’t know about it. If the people knew about it there would be a revolution. The wrath of the people would be unstoppable.”

For thousands of years the power of China’s rulers hinged on their ability to feed the people. “Revolutions aren’t caused by political differences, they’re caused by a lack of bread.”

 

Afghanistan’s Newest Benefactor – China

No, they’re not going to help NATO fight the Taliban or al-Qaeda. Instead the Chinese will be helping themselves to one of the largest copper deposits in the world. It’s the Aynak copper mine in Logar province and the Chinese beat out rivals from Canada, the US and Russia to get it.

China Metallurgical Group has committed $4-billion to the project which will also see a direct rail line constructed linking Afghanistan and China. I wonder if the Chinese project will be using electricity generated by the Kajaki dam NATO has been struggling to defend against the Taliban? Maybe NATO will even wind up providing security for China’s investment.

It’s believed that part of the investment is a desire, on China’s part, to “push back” against India and the Indian/US efforts to contain China. Now it’s seen in some quarters that it’s China working to encircle India. This is the take of M K Bhadrakumar, a career diplomat in the Indian Foreign Service for over 29 years, published in Asia Times Online:

“…the mother of all Chinese encirclement of India still remains largely unnoticed in Delhi – the Beijing-Tehran axis. There is wide recognition that if the United States hasn’t been able to push through another tougher United Nations Security Council resolution against Iran over its nuclear program, that has been largely because of China’s reluctance to concur.

But what happened last Sunday still came as a bolt from the blue. China Petroleum Corporation, better known as the Sinopec Group, signed a contract with the Iranian Oil Ministry for the development of the Yadavaran oil and gas fields in southwestern Iran.

The current estimation is that the project cost will be $2 billion. Under the contract, China will make the entire investment necessary to develop the fields. The first phase is to produce 85,000 barrels of oil per day and the second phase will add another 100,000 barrels. According to Iranian estimates, Yadavaran has in place oil reserves of 18.3 billion barrels and gas reserves amounting to 12.5 trillion cubic feet.

China outmaneuvered both the US and India on Iran. When the American National Intelligence Estimates collapsed Bush’s claims of Iran’s imminent nuclear threat to the world, China was ready to move – and quickly. India, meanwhile, found itself shut out, having succumbed to US pressure to sanctions against Iran.

Indian diplomacy has a lot of catching up to do. In the short term, Delhi will have to pay a price for overlooking the geopolitical reality that Iran is the only really viable regional power in the Middle East and the Persian Gulf. Delhi’s best hope is that true to their innate pragmatism, Iranians will let bygones be bygones.

 

Flushing Out Beijing’s Open Sewers

They’re canals actually but they’re stagnant and fetid, just the sort of thing you don’t want to display to Olympic visitors.

The answer? A massive public works project intended to flush’em out before the games. From the Sydney Morning Herald:

To replenish Beijing’s dead waterways, 3 billion cubic metres of water will be pumped 300 kilometres from four dams near the capital of neighbouring Hebei province. It was a mammoth but temporary measure designed to make Beijing sparkle for foreign tourists, said Wang Jian, an official at the Haidian information centre.

“This water diversion will make the water in Beijing’s rivers all clear and clean,” Mr Wang said. “We can’t let foreigners come and look at the water when it is still dark and stinky.”

The engineering feat will help transform one of the world’s driest capitals into an international oasis when the Games begin on August 8.

Beijing residents consume only one-eighth as much water as the average Chinese person and one-thirtieth of the global average.

And after the games? Back to the good old “dark and stinky.” Beijing is now home to 18-million people, four times its population in the 60s.

 

China’s Next Great Revolution?

Usually revolutions are aimed at toppling the very highest authority. In China there’s a call for a revolution against local government.

The head of China’s environmental agency blames public discontent and riots on pollution and has called for a “struggle” against polluters. Sounds straight out of Mao’s Red Book, eh? From The Guardian:

Zhou Shengxian’s comments “underscore the frustration of state mandarins at local government officials who ignore environmental standards in order to attract investment, jobs and bribes.

“Beijing is trying to shift the economy on to a more sustainable development track. But factory owners who violate state guidelines are often protected by local officials. …According to Mr Zhou, the state environmental protection administration chief, many plants build secret pipes to discharge polluting chemicals. Others release toxins when locals are asleep.

“Demonstrations against power and chemical plants have become increasingly common in recent years. In May, thousands took to the streets of Xiamen, in Fujian province, leading to the suspension of a petrochemical plant. In 2005, police killed at least three villagers in Dongzhou, Guangdong province, while quelling a riot over a planned power plant.

“Anger has been fuelled by unfair land grabs and health fears. According to the government, two-thirds of China’s 595 cities now have unhealthy air.

“Pollution scandals are common. Earlier yesterday, state media reported that tap water had been restored to 200,000 residents of Shuyang county in Jiangsu after a chemical spill halted supplies for 40 hours. The environment agency said more than a quarter of the seven main river systems were so polluted that the water was unfit for human contact.”

China today faces a hellish host of critical, environmental threats ranging from air and water pollution to freshwater depletion and desertification. It is really difficult to conceive how China can bring these threats under control and maintain its planned industrial and economic expansion. It is definitely burning the candle at both ends.

 

Or Else What, Steve?

He’s at it again. Stephen Harper is laying the law down to… why, to China of course. Steve says China better not threaten Canada over our (his) criticism of human rights abuse or… or… or something they sure won’t like will happen.

Naturally Harper didn’t send this ultimatum to the Chinese. No, he thought it’d be better if he just strutted his stuff before a gaggle of reporters in Halifax.

“I would point out to any Chinese official that just as a matter of fact, China had a huge trade surplus with this country so it would be in the interest of the Chinese government to make sure any dealings on trade are fair and above board,” Harper said.

Last time I checked, both China and Canada operated under the World Trade Organization rules so, unless Harpie is claiming China is in breach of those rules in its trade with Canada, he’s blowing smoke. Of course, if the Harpster is accusing China of that sort of breaches, why the hell has he waited for a photo op to take action?

Here’s a suggestion. If Harpo has something he wants to “point out to any Chinese official” maybe he ought to wait until he has an actual Chinese official within earshot. Just a thought.

 

The Sleeping Bear Awakes

There’s an arms race underway, maybe it’s more than one.

On the side of the West, it’s pretty much limited to the United States where George Bush has been picking up the pace of testing and development of new aircraft, nuclear weapons, anti-missile systems and a myriad of advanced technologies. Looking at all of the lethality rolling out of American factories the one word on everyone’s mind but almost no one’s lips is – China.

China is seen as a competitor to America as a natural result of it’s newfound wealth and industrial might. Along with new factories, China sought to modernize its military. The Chinese have been whittling down the size of their massive army but making rapid strides in developing their air and naval forces. To do this the Chinese have relied heavily on fairly modern, highly capable weaponry purchased from Russia but lately a new generation of Chinese-made ships and aircraft has begun to emerge.

Because China is a good sea voyage away from the US and because the American military presence in that region has been shrinking ever since the fall of South Vietnam, Washington has sought to find other means of containing the People’s Republic. This has been accomplished by developing an alliance with another emerging industrial power, India.

The United States is rearming, China is rearming, so is India. India already has a highly capable army and air force. Like China it has equipped its forces with the best the Russians sell, along with a smattering of aircraft, etc. from the West. The big deal for India is the rapid expansion of its navy to become a true “blue water fleet.” The Indian navy is looking to add about 40-warships to its fleet in order to allow it to maintain a region of influence extending all the way over to the Sakhalin islands which, entirely coincidentally, would mask China’s entire coastline.

A powerful Indian navy presents China with several problems. One is the challenge it poses to China’s sea routes to the Middle East and the dwindling oil bounty for which the two are competing. Another is having a foreign and not entirely friendly navy establishing a maritime blockade threat. India doesn’t have to do anything to provoke China with that one.

America, China and India – all racing in the quest for more and better. Bad as that is, it’s about to get worse. Russia, flush with new found oil wealth and an increasingly autocratic government, has decided it wants in. Moscow has announced plans to begin acquiring new ICBMs (in case you’ve forgotten – intercontinental ballistic missiles), new submarines and even possibly new aircraft carriers.

The Russian military has languished on a scrap heap since the Soviet Union fell apart in 1991 and we all breathed a sigh of relief for that. For all its woes, Russia still maintains 1.13 million in uniform.

Where is this headed? Who knows? As Gwynne Dyer noted in his book Future Tense the Bush administration has worked very hard to undermine the United Nations and the international treaties and protocols associated with it, paving the way for a return to 19th century secret alliances, hostility, distrust and even paranoia.

Ladies and gentlemen, there is the true Bush legacy.