Regional Roundup for week of 6.14.13

This week’s big news in the region had more to do with the US than any other country. Last weekend saw Barack Obama and Xi Jinping meet for the much-anticipated Sunnylands Conference in southern California. At the same time, former US National Security Administration (NSA) employee Edward Snowden leaked classified information on the US’s security practices at home and abroad and has taken up refuge in Hong Kong. Sinocism has had excellent coverage of both stories and we recommend that you read more about it all here.

CHINA IN THE REGION/WORLD

United States and China Agreement on Hydrofluorocarbons (HFCs) Consumption and Production, June 2013  Council on Foreign Relations – President Obama and Chinese President Xi Jinping met in California June 7-8, 2013. Based on the Montreal Protocol findings regarding ozone layer-depleting emissions, they issued this agreement to reduce the production and consumption of HFCs, to address one aspect of climate change.

Inside the NSA’s Ultra-Secret China Hacking GroupForeign Policy The media has focused at length on China’s aggressive attempts to electronically steal U.S. military and commercial secrets, but Xi pushed back at the “shirt-sleeves” summit, noting that China, too, was the recipient of cyber-espionage. But what Obama probably neglected to mention is that he has his own hacker army, and it has burrowed its way deep, deep into China’s networks…

Chinese Land Grabs Revised Downward China in Africa – I’ve been critical of the Land Matrix’s early efforts to post a very problematic “database” of large scale land acquisitions. That database was recently revised and has been re-posted. I haven’t yet gone through it (I will) but at least regarding China, it appears more accurate than the earlier version.

Solar Panels: When Trade, the Environment, and Geopolitics Collide Peterson Institute – What happens when policy goals in one area collide with goals in another? This occurred when US and European manufacturers of solar panels squared off with environmental and geopolitical interests over cheap Chinese products. In the United States, domestic producers of solar panels succeeded in raising tariffs on Chinese imports.

Copycat Capitalists  Project Syndicate – Given the West’s anemic growth performance in recent years, it is hardly surprising that envy of China’s economic dynamism has manifested itself in official policy. But Western countries are shifting to statism at the very moment that China is heading in the opposite direction.

China’s Cold Eye on Hot Money Project Syndicate – With China feeling the impact of large-scale inflows of short-term capital, the authorities have announced new rules aimed at controlling hot money and reducing external risks. But, while the regulations are essential to managing the renminbi’s rapid appreciation and ensuring the accuracy of trade data, will they be enough?

The butterfly effect  Sea Globe Editorial – As the nature of China’s economic expansion changes, what will imbalances in its economy mean for Southeast Asia? Having scaled the ladder to the upper rungs of China’s top trading partners, Asean has much to gain from its strong neighbour. Trade between the two is set to expand to $500 billion by 2015, as they strengthen ties amid a global slowdown. While government officials are keen to present a rosy outlook for bilateral trade volumes, a health check of China’s economy throws up a few surprises.

Kazakhs launch ‘Silk Road’ China-Europe rail route | Reuters Kazakhstan has launched a new transit railway linking China to Europe, aiming to beat rival routes for journey time in the competition to handle a growing flow of goods along the ancient Silk Road trade route. “Kazakhstan is a virtual bridge linking the East and the West,” Yerkin Meirbekov, deputy railway department chief at Kazakhstan’s Transport Ministry, said in an interview. “You can actually say this is the revival of the Silk Road.”

China details Indian Ocean strategy and interests | The Hindu The blue book makes a case for China to deepen its economic engagements with the Indian Ocean Region’s (IOR) littoral states, but stresses that Beijing’s interests will be driven by commercial — rather than military — objectives. However, it warns that the Indian Ocean could end up “as an ocean of conflict and trouble” if countries like India, the U.S. and China failed to engage with each other more constructively as their interests begin to overlap.

Chinese delegation in Ghana after nationals arrested in crackdown on illegal gold mining – Xinhua A Chinese joint working team is in Ghana to discuss issues linked to Chinese nationals in the crackdown on illegal gold mining in the West African country. Upon its arrival on Tuesday, the team of the Chinese ministries of foreign affairs, commerce and public security met with Ghanaian officials of the security and immigration departments to discuss the issues.

China in Africa: The New Imperialists? : The New Yorker It happened in Zambia like it could happen elsewhere in Africa. Chinese investors made deals with the government to mine its natural resources, filling federal coffers with billions of dollars. Chinese immigrants moved into cities and rural towns. They started construction companies; opened copper, coal, and gem mines; and built hotels and restaurants, all providing new jobs. They set up schools and hospitals. But then instances of corruption, labor abuse, and criminal coverups began to set the relationship between the Chinese and the Africans aflame.

Realpolitik and Spinning the U.S.-China Summit – NYTimes.com In an interview last year, I asked a former high-ranking administration official if the United States would defend Taiwan in the face of a Chinese attack. “That’s what it’s useful for them to believe,” he told me, adding that it was “profoundly important” that the United States manage the relationship to not allow it to reach that point. His answer holds true for the Senkaku as well.

CHINA AT HOME

China lands three astronauts on Tiangong-1 space station Guardian – Astronauts will perform experiments and deliver science lectures to young Chinese during 12 days on orbiting laboratory. China’s latest manned space capsule docked with the orbiting space station, Tiangong-1, on Thursday, when three astronauts climbed aboard what will be their home for the next week, state media reported.

China-South Asia Expo Sets Investment Record – Go Kunming Kunming’s much-anticipated China-South Asia Expo came to close on Monday. When the dust settled and the investments added up, contracts totaling an astonishing $17 billion had been signed.

China’s Audit Office Shines Light On Local Government Debt – China Real Time Report – WSJ It is hard to tell how representative the survey is of local government debt. Given that the audit office found total outstanding local government debt at the end of 2010 stood at 10.7 trillion yuan, Monday’s report probably represents 25% to 30% of China’s current local government debt picture, which should be a fair sample.

Mapping China’s middle class | McKinsey & Company Our latest research suggests that within the burgeoning middle class, the upper middle class is poised to become the principal engine of consumer spending over the next decade. As that happens, a new, more globally minded generation of Chinese will exercise disproportionate influence in the market. Middle-class growth will be stronger in smaller, inland cities than in the urban strongholds of the eastern seaboard.

Across China, the Itch to Spend Is Strong – WSJ.com Some provinces were attempting to kill two birds with one stone by bringing private funds into the investment push. “We will allow private capital into all sectors where it is not clearly barred by the central government,” said Guangdong province…Though the overall picture on growth remains weak, there are tentative signs that heavier investment from local governments is starting to pass through into stronger demand.

World Bank Cuts Global Outlook as China Slows; Asian Stocks Fall – Bloomberg China’s growth outlook was cut to 7.7 percent from 8.4 percent, according to the World Bank’s report. The 6.1 percent forecast for India was reduced to 5.7 percent and Brazil’s was lowered to 2.9 percent from 3.4 percent. While China’s slowdown was expected, “it is the timing, that it happened a bit quickly that caught people by surprise,” Basu said. “Given that China used to grow at 10 percent and it was pulling so much of the world along with that, that is indeed a concern,” especially in regions that benefited from Chinese investment such as sub-Saharan Africa, he said.

China’s first aircraft carrier leaves homeport for sea trials – Xinhua | English.news.cn China’s first aircraft carrier, the Liaoning, has left its homeport of Qingdao in east China’s Shandong Province to conduct scientific experiments and sea training, naval authorities said Tuesday. This was the first time for the carrier to leave its homeport to conduct training voyage since it anchored there in February, according to the People’s Liberation Army (PLA) Navy.

A Biographical and Factional Analysis of the Post-2012 Politburo | Hoover Institution Cheng Li–This essay assesses the new Politburo of the Chinese Communist Party—the 25 highest-ranking leaders in the party, government, and military in present-day China—using biographical data regarding age, gender, birthplace, educational and occupational credentials, bureaucratic portfolio and career patterns, and political affiliations and factional backgrounds. Norms of elite selection may be inferred from such data, which allows a broad-based quantitative and qualitative analysis of the changes in the top leadership.

China conducts soil pollution survey – Xinhua | English.news.cn The government plans to conduct a nationwide soil pollution survey, the Ministry of Land and Resources said Wednesday. Soil samples will be collected at multiple depths in order to find both the natural condition of the soil and the impact that human activity has had on it, the ministry said.

China Leads Non-OECD Economies’ Oil Use to Top OECD – Bloomberg OECD members will use 45.5 million barrels of oil this year, compared with 44.5 million from emerging markets, the EIA forecast. In 2014, demand from the developing economies will rise to 45.9 million barrels a day, while OECD consumption will drop to 45.3 million, according to the estimates from the EIA. China’s consumption will rise to 11.1 million barrels a day next year, up 4 percent from this year’s 10.7 million, the EIA said.

REGION

Thailand May Help Myanmar Improve Data Transmission WSJ – Thailand is mulling providing Myanmar with cables that enable international transmission of data as an alternative to its current sole route via China, Thailand’s Minister of Information and Communication Technology said.

EU to provide 200,000 euro to assist Rohingya refugees in Thai detention centres The Nation – The European Union is committing 200,000 euro to provide humanitarian assistance to Rohingya refugees being detained in Thailand, the EU Delegation to Thailand announced Friday.

Thailand asks Laos to help legalise 56,000 overseas workers The Nation – Vientiane – Thai authorities have sought Laos’ help in speeding up the documentation of an estimated 56,000 Lao nationals now working in Thailand illegally, media reports said Friday.

Global financial markets anxious to avoid many pitfalls of ‘political risk’ Guardian – Investors wary of turmoil in Greece and Turkey, doubts about Abenomics, and uncertainty over the Fed’s QE programme. When investors in the world’s financial markets are in an anxious mood, such as in recent weeks, any new piece of information tends to be taken as a fresh reason to sell. Their overarching concern – and the markets’ frame for almost everything else that happens – is that the US Federal Reserve may be considering “tapering” its massive quantitative easing programme, amid signs that the world’s largest economy is starting to recover.

Newer Economic Models CFR – In the Asian Review of Books, editor Peter Gordon reviews both my new book Democracy in Retreat and a forthcoming book by longtime China journalist Joe Studwell, How Asia Works; Success and Failure in the World’s Most Dynamic Region. I have always found Studwell’s work to be among the most thought-provoking and contrarian on Asia – the two often go together – and his new work is no exception. It adds to the growing literature suggesting that the modern state capitalists, like China, are pursuing models of development not only sharply different from those advocated by the West but also different from the Asian tigers and tiger cubs – many China-watchers have suggested that China’s model is simply an updated version of what worked earlier, for nations like South Korea. I will be adding my own contribution to the state capitalism debate in the next year. Read the whole review here.

Southeast Asian Capitals Boast High-End Bargains, Report Says WSJ – Certain high-end goods and services can be had on the cheap in cities like Jakarta, Manila, and Kuala Lumpur, compared to the prices demanded in some other cities in Asia, according to a new report out Tuesday from Bank Julius Baer.

Missing Shangri-La Carnegie Endowment for Peace  – Bureaucratic and political holdups in India’s defense ministry have undermined New Delhi’s ties with its neighbors.

Multiplex World Carnegie Endowment for Peace – Two difficult strategic challenges will test East Asia’s diplomats in coming years: first, the collision between economic integration and security fragmentation, and, second, the dominance of form over function in the institutions that could help to mitigate this debilitating dynamic.

Climate Change by the Numbers Project Syndicate – A confidential draft of the latest report by the Intergovernmental Panel on Climate Change was sent to governments to review on June 7, ahead of the publication of the final version this autumn. The IPCC’s latest work provides the starkest assessment yet of how the earth’s climate is responding to rising levels of greenhouse gases.

Sustainable Visions Project Syndicate – UN Secretary-General Ban Ki-moon is mobilizing global action around the great challenge of our time: sustainable development. It is a call that the world must heed.

Officials Across Asia Suspect NSA Is Intercepting Their Emails – Business Insider Government and security officials in parts of Asia have been sending sensitive information and policy documents via e-mail services offered by U.S. web giants, and concerns are spreading that these may have been monitored and collected by the National Security Agency (NSA). The official name cards of several directors at Indonesia’s ministry of foreign affairs, for example, give only Yahoo or Gmail addresses, services provided by Yahoo Inc and Google Inc. One researcher who deals regularly with Indonesian security and police officials said all of them used Gmail or Yahoo to communicate often sensitive information.

India, China, and the Map to Two Billion Connected Devices Flurry measured a 47% increase in active smartphones and tablets in the United States between April of 2012 and April of 2013. While that number sounds impressive, it actually puts the U.S. in the bottom 5% of countries for connected device growth in the past year. Worldwide, growth of these devices is exploding. To be in the top 5% of countries for growth over the past year, a country’s number of active connected devices needed to more than triple.

Abe, Obama agree on importance of ongoing talks over Senkakus – The Japan News Prime Minister Shinzo Abe and U.S. President Barack Obama agreed in telephone talks Thursday that it is important for Japan and China to continue dialogue over the Senkaku Islands, which are at the center of tensions between Tokyo and Beijing. During the talks which lasted for about 30 minutes, Abe told Obama that doors are always open on the Japanese side for dialogue with China, officials said.

 CAMBODIA

Twilight fears Sea Globe Editorial – When Pring Am’s adult son could no longer afford to support her, the 67-year-old grandmother returned to a tiny rural village in Prey Veng province, near where she grew up. Left with no family to rely on and no land of her own, Am felt compelled to do something she had never considered since the dark days of the Khmer Rouge: she started begging for food.

 LAOS

China Setting up First University Campuses Abroad – ABC News In the capital of tropical Laos, two dozen students who see their future in trade ties with neighboring China spent their school year attending Mandarin classes in a no-frills, rented room. It’s the start of China’s first, and almost certainly not its last, university campus abroad. “There are a lot of companies in Laos that are from China,” said 19-year-old Palamy Siphandone. She said she chose the Soochow University branch campus after hearing it would offer scholarships to students with high scores.

 MALAYSIA

Malaysia Fears Spillover From Myanmar Violence After 4 Killed WSJ – Malaysian authorities worry that ethnic and racial tensions in nearby Myanmar are spilling over into their country after a series of clashes between Myanmar nationals near Kuala Lumpur left at least four people dead.

Malaysia to repatriate Burmese nationals after clashes  AFP – Malaysia said Thursday it would work with Burma to repatriate thousands of their nationals following clashes in the community that left at least four dead and led to a security sweep.

MYANMAR/BURMA

Foreigners struggle to find housing in Rangoon DVB – Foreigners settling in Rangoon are struggling to find places to live due to archaic laws still in place in the country. As Burma opens up to international businesses, more and more foreigners are moving to Rangoon to work and live.

Farmers in hiding near Inle Lake as officials crack down on ‘plough protests’  DVB – Locals near southern Shan state’s Inle Lake have gone into hiding after officials issued warrants for their arrests following a demonstration where the farmers ploughed land that had been confiscated by a controversial hotel zone project.

Muslim man accused of sparking Burma unrest jailed for 26 years  Guardian – Court verdict follows pattern of convictions for Muslims, who have been the main victims of Buddhist-led violence. A Muslim man whose attack on a Buddhist woman set off sectarian rioting in north-east Burma last month has been sentenced to 26 years in prison, a local politician said.

UN delivers aid for first time in a year to Kachin refugees The Nation – Yangon – A United Nations convoy has been granted permission to deliver aid to thousands of Kachin refugees in northern Myanmar for the first time in a year, UN officials said Friday.

PHILIPPINES

Transparency in the Philippines Guardian – Vincent Lazatin says he has no qualms about working with the government, or with big institutions like the World Bank. “Keep your friends close and your enemies closer,” he laughs. Lazatin is the amiable executive director of the Transparency and Accountability Network (Tan), a coalition of civil society, NGO, academic and research organisations in the Philippines.

Philippines Vows to Defend Territory, Sovereignty – ABC News Philippine President Benigno Aquino III vowed Wednesday his country will not back down from any challenge to its sovereignty and territory amid a sea dispute with China. He said in a speech marking the 115th anniversary of the country’s independence from Spain that the Philippines has not claimed territory that clearly belongs to another country but only asks that “our territory, rights and dignity be respected.”

THAILAND

Thailand’s English skills lowest in SEA The Nation – The JobStreet.com English Language Assessment (JELA) results show Singapore workers have the highest average score while Thai workers have the lowest. The results are from the 1,540,785 assessment takers in the Southeast Asia countries of Singapore, the Philippines, Malaysia, Indonesia and Thailand.

VIETNAM

Ministry of obscurity Banyan, The Economist – THE Communist Party cadres who run Vietnam’s government have never been regarded as the biggest fans of free speech—they prefer jailing the dissidents who challenge their authority—but they may have reached a new low recently, with a law designed to force foreign television broadcasters to pay to be censored.

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