Regional Roundup for Week of 9.21.2013

For millions across the region and around the world, Thursday marked Mid-Autumn Festival, a harvest holiday that has its origins in Ancient China. For those of you celebrating, ExSE wishes you a happy Mid-Autumn Festival. Enjoy  your mooncakes!

In regional news, Chinese President Xi Jinping concluded a very successful trip to Central Asia. Energy and trade deals were signed between China and the Central Asian states in a move that likely secures China’s economic supremacy in the region for some time to come. Within China, the government’s anti-corruption anti-online rumour campaigns are in full swing and the verdict in the Bo Xilai case is expected tomorrow (Sunday).

As mentioned last week, ExSE is in the process of a makeover. Expect the new and improved website to debut in the next few weeks. As we are improving the outward look of the website, we’re also looking to improve content and are in the market for new contributors. If you have any interest in writing for East by Southeast, please email us at


Analysis: China eyes private funds to tackle bad-debt buildup, avoid bailout | Reuters analysts think the official non-performing loan ratio of less than 1 percent is a considerable understatement. Most analysts put it in the 3 to 6 percent range, but Reuters estimates based on official data shows that their current capital and loan-loss provisions would suffice even if more than a fifth of their loans went bad. But much of the potential risk lies outside of the official banking system. Goldman Sachs has said that under its worst-case scenario credit losses for the entire system could reach $3 trillion, or a fifth of forecast GDP in 2016, though actual losses would probably be considerably lower.

Shanghai Trade Zone Said to Open This Month as Li Tackles Reform – Bloomberg An opening ceremony for a Shanghai free-trade zone to test economic reforms is planned for this month, with Chinese Premier Li Keqiang set to officiate, two people with knowledge of the matter said. The event may be on a day from Sept. 27 to 29, depending on Li’s schedule, said the people, who asked not to be identified because they weren’t authorized to speak publicly about the matter. The Shanghai Daily reported yesterday that the zone will officially open Sept. 29, citing Wang Xinkui, director of the city’s counselor’s office.

Tencent Market Value Tops $100 Billion on China Internet Growth – Bloomberg Shenzhen-based Tencent, which went public in 2004, is the largest Internet company in Asia and has a market capitalization greater than SoftBank Corp. (9984), McDonald’s Corp. (MCD) and Boeing Co. (BA) It trails a handful of technology companies worldwide, including Apple Inc., Google Inc., Microsoft Corp., Samsung Electronics Co. and Facebook Inc. (FB)

Petroleum and Purges–Sinica Podcast The Beijing rumor-mill is back on overdrive. With the trial of Bo Xilai only barely concluded and the country now openly speculating on the length of the disgraced politician’s likely sentence, factional battles targeting Bo’s remaining supporters have moved center-stage, as the government has launched an anti-graft probe into the country’s petroleum industry…Joining us to discuss these rumors are two outstanding observers of modern Chinese politics: Bill Bishop from Sinocism, and Jeremy Page from the Wall Street Journal.

Closer Look: A Railroad Corruption Trial Raises More Questions than Answers – Caixin Zhang was a stranger to academia, so he tried a back door: book publishing. He gathered experts from the China Academy of Railway Sciences, Southwest Jiaotong University and Beijing Jiaotong University at an expensive hotel in Beijing in 2007. He paid them to write books and application materials in his name, all of which were intended for use on his CAS application. “Room and board [for the writers] was paid by a state-owned firm doing import-export business on behalf of the rail ministry,” the source said. “They started work in March and spent two months writing three books.” Fraud was piled upon fraud in this endeavor. The three books written in Zhang’s name were given fake publication dates – January 2007 – so it would appear they were not directly linked to his application.

Chinese cities: three trends you should know | beyondbrics China’s urbanisation is taking place at 10 times the pace of the first (that of the UK) and is 100 times the scale, according to McKinsey. Working out what’s going on can be pretty hard. So, a final thought post-WEF in Dalian: industry experts share three Chinese “big city trends” – in real estate, consumption patterns, and employment.

China’s profitable trade in stuffed rare animals | Lü Minghe – China Dialogue  “Natural death and loss” have therefore become common events in Chinese zoos. “The official price for a live tiger is sometimes less than 20,000 or 30,000 yuan. If you can have it die a “natural death”, you can make a lot more money,” explained the same source.  And there’s no shortage of business for the taxidermists. Businesspeople and government officials are the purchasers and collectors – products are often given as gifts between the two groups. “It’s a sign of status and quality, and it’s easier to accept than cash,” said the same source. Purchases are often made due to animals appearing in Chinese idioms – there is one about the ferocity of tigers, while the Chinese word for deer is homophonous with part of an idiom about getting rich. And monkeys and elephants, the kings of the animal kingdom, are also popular.

Chinese police detain well-known entrepreneur as part of crackdown on political activism – The Washington Post Last month, Chinese police invited Wang Gongquan in for a “cup of tea,” often a prelude here to detention. He had launched a public petition calling for the release of arrested dissident Xu Zhiyong, and the authorities were not amused. But Wang effectively told the police to forget it — he had no time for tea, he was traveling, and he had said everything he wanted to say. Wang figured he could get away with defying the Chinese government. He was a respected businessman, a multimillionaire who had made a fortune in real estate and in Silicon Valley. He was a social media sensation, and he had been careful, as he saw it, not to break any laws. But he knew he was taking a chance.

For China, a New Kind of Feminism – Ms. Huang and Ms. Ye say China is ready for “Lean In,” regardless of the tight political atmosphere. “I think everything we do in the Lean In circle is positive,” Ms. Huang said. “We’re not in violation of anything, so we should be O.K.”Ms. Ye said: “I’ve thought about it because I’m very careful. I think if the government allowed Sheryl Sandberg to promote her book, then the government supports the content of her book.”

China navy chief says operational aircraft carrier a few years away | Reuters “We talked in great detail in San Diego with our aviation people and Admiral Wu’s aviation people,” said Admiral Jonathan Greenert, the U.S. Chief of Naval Operations, who hosted Wu. “It was great and inspiring to see two professionals talk about a common challenge – aviation from an aircraft carrier.”

Chinese FM to meet Kerry Thursday: State Department – Xinhua U.S. State Department said Monday that Secretary of State John Kerry will host Chinese Foreign Minister Wang Yi for a bilateral meeting Thursday. During a daily press briefing, State Department deputy spokeswoman Marie Harf said the meeting between Kerry and Wang Yi is a regular consultation covering a range of bilateral, regional and global issues.

China Increased Holdings of Treasuries in July as Yields Surged – Bloomberg China’s stake increased by $1.5 billion in July, or 0.1 percent, to $1.277 trillion, after declining the prior month, according to Treasury Department data released yesterday. Treasuries held by Japanese investors, who have the second largest stake in U.S. government debt, rose to a record.

China military tells U.S. not to encourage Japan over isles | Reuters Wang Guanzhong, Deputy Chief of General Staff of China’s People’s Liberation Army, said during scheduled talks with U.S. counterparts in Beijing that China was determined to defend its territory, but had all along exercised restraint. This issue should not become a problem between China and the United States, and China hopes that the United States does not become a third party in this issue,” the Defence Ministry quoted Wang as telling U.S. Under Secretary of Defense for Policy James Miller. “The United States should maintain a consistent stance and policy, not send wrong signals nor support and connive with the relevant country to do as they please,” Wang added.

Commentary: Sincere moves needed to jumpstart China-Japan relations – Xinhua  There is no month like September that witnessed so many major events on the bumpy road of China-Japan relations. A recent editorial carried by Japan’s Asahi Shimbun asked China to “be aware of the foolishness” of dredging up “nationalistic sentiments over history-related issues.” Asking Chinese people to let it go at such a time just doesn’t ring the bell, while it will be a wise choice if Japan sends out more positive messages on a tacit understanding.

China-Arab States Expo opens in Ningxia – Xinhua | The first China-Arab States Expo, a key platform to promote the relationship between China and the Arab states, kicked off on Sunday morning in northwest China’s Ningxia Hui Autonomous Region. Yu Zhengsheng, chairman of the National Committee of the Chinese People’s Political Consultative Conference, attended the exposition, which runs until Sept. 19 in the Ningxia capital, Yinchuan. Foreign leaders, including King Abdullah II Bin Al-Hussein of Jordan, King Sheikh Hamad bin Isa Al-khalifa of Bahrain and Vanuatu Prime Minister Moana Carcasses Kalosil attended the opening ceremony.

China in Central Asia: Rising China, sinking Russia | The Economist  LESS than a decade ago little doubt hung over where the newly independent states of Central Asia had to pump their huge supplies of oil and gas: Russia, their former imperial overlord, dominated their energy infrastructure and markets. Yet today, when a new field comes on stream, the pipelines head east, to China. As if to underline the point, this week China’s president, Xi Jinping, swept through Central Asia, gobbling up energy deals and promising billions in investment. His tour left no doubts as to the region’s new economic superpower.

India tests nuclear capable missile with range as far as Beijing | Reuters India successfully test-fired for a second time a nuclear-capable missile on Sunday that can reach Beijing and much of Europe, bringing a step closer production of a weapon designed to strengthen its nuclear deterrent.

China makes clear full democracy not on cards in choosing Hong Kong leader | Reuters Zhang Xiaoming, the head of Beijing’s Liaison Office in Hong Kong, said open nominations for the leader, or chief executive, would not be allowed. Zhang’s open letter, sent to a major pro-democracy group, the Civic Party, quoted the city’s mini-constitution, the Basic Law, as saying that all candidates could only be nominated by a “broadly representative nominating committee”. “There is no other option,” Zhang said in the letter.

Ma’s approval rating plunges to 9.2 percent – Taipei Times President Ma Ying-jeou’s (馬英九) approval rating hit a new low of 9.2 percent, the first time the rating has dipped to to single-digits, in a public opinion poll released yesterday amid widespread public dissatisfaction with Ma’s role in ongoing political strife within the Chinese Nationalist Party (KMT).

China’s World: Philippines Looks to Revive U.S. Naval Base – bringing back the once-spurned Yanks won’t be so simple. The reasons illustrate the way that China’s rapid rise as a regional military power—one that now possesses fleets of modern warships, nuclear-powered submarines, ballistic missiles and stealth fighters—has reshaped the calculus for Pentagon planners in Asia since that vote to eject the American forces. For a start, the Philippines itself would have to reverse a constitutional ban on allowing a foreign power to establish a permanent military base. But assuming that was possible, America still wouldn’t be interested. Bases are potential sitting ducks for Chinese missiles. Plus, they are expensive. At a time of budget cuts, it’s far cheaper to sign a treaty with friendly countries guaranteeing access for U.S. forces than to pay rent. In military-speak, America wants “places not bases.” As important, U.S. military moves in Asia now must be weighed against the risk of provoking China at a time when tensions over territorial claims in the South China Sea are running high.


Rebalancing the Maritime Pivot to Asia|The Diplomat

When it appeared, prior to the recent deal with Russia, that the U.S. might be preparing for military strikes against Syria, a chorus of voices emerged to prophesize that this latest Middle Eastern entanglement would have dire implications for the U.S. maritime pivot to Asia. Speculation was rife that Washington may have indeed already begun the process of re-drawing its commitment to East Asia. Yet, chronic skeptics eager to write the pivot’s obituary may be premature. The rebalancing may be at a crossroads, but there appears to be some innovative thinking at work to realign the fundamentals of the strategy to help  Washington achieve its broader objectives.

History Wars: A Long View of Asia’s Territorial Disputes| The Diplomat

Since neither the Thais nor the Cambodians seem inclined to accept an unfavorable verdict, the ICJ’s decision will probably go down as just another moment in the temple’s long and contested history, rather than as the end of the story so far as the dispute goes. Even so, the matter may be nearer closure than some of Asia’s other most tortuous territorial arguments. Here, The Diplomat reviews the history of five of them. Among the contradictory narratives and fluctuating fortunes, one thing, at least, is clear. When Asian leaders insist that their country’s claim to a contested territory is historically indisputable, they are never right.

One night to Bangkok|Banyan Tree

Digging tunnels through the geologically unstable limestone mountains of northern Laos is still China’s best and only bet for a route to the Gulf of Thailand. It has already secured access to the Indian Ocean, both by road and by a pipeline that should pump 10% of China’s total oil requirement upcountry to Kunming from the port city of Kyaukpyu in Myanmar. Success has been proved elusive further up the coast, where South-East Asia and South Asia meet. A proposed road and rail link, connecting Kunming to the Bangladeshi port of Chittagong via Myanmar, is a…Continue reading.

12 Things to Know about MDGs in Asia and the Pacific|ADB

Two years before the 2015 deadline, developing Asia shows mixed progress in achieving the Millennium Development Goals (MDGs). Income poverty has been slashed by half, but the region still faces challenges such as rising inequality and environmental sustainability. Here are 12 things to know about the status of MDGs in the region.

NGO to Cut Rations for ‘Self-Reliant Refugees’ on Thai-Burma Border| The Irrwaddy

Rice rations for many of the more than 120,000 Burmese refugees living on the Thai-Burma border will be reduced, due to a reduction in funding for a humanitarian organization that has provided food for them for more than two decades. The Border Consortium (TBC) says its funding for humanitarian work has dropped as donors redirect their funds to programs preparing for the return of refugees to Burma. “However, donors are continuing substantial funding to humanitarian aid and making sure refugees continue to receive a standard ration while making sure the most vulnerable receive extra and children see no reduction,” TBC spokesman Mike Bruce told The Irrawaddy on Friday.


Protest Turns Into Clash With Police in Cambodia|NYT

The country’s political deadlock turned violent on Sunday as opposition supporters clashed with security forces in the streets of Phnom Penh.

Mahendraparvata: Cambodia’s Archaeological Rebirth|The Diplomat

In the popular imagination, Cambodia calls to mind two polarizing images: Angkor Wat and the nation’s bloody recent history under the iron-fisted rule of dictator Pol Pot and the Khmer Rouge. As the nation gradually emerges from the trauma that was its 20th century, archaeologists are beginning to venture back into its dense, steamy jungles where significant discoveries await—among them, the ancient Khmer city of Mahendraparvata.

From the fields to the fungi farm|SEA Globe

The Cambodia Mushroom Farm is similarly evasive, a ring of one-room structures hidden behind an unmarked gate on the outskirts of Phnom Penh. Separate indoor environments make it possible for owner Saorithy Kim to control each stage of his mushrooms’ development. It is a practice that contrasts with traditional growing methods in the Kingdom and could revolutionise the industry. “In Cambodia, the rice field is the traditional mushroom growing vessel. The mushroom grower likes to grow them not in the house but in the rice field so that they can do it during the dry season,” Saorithy Kim said. “But in the rainy season, they cannot do it… the yield, the output, is not sustainable.”


Cruise control|SEA Globe

“The Indonesian navy has higher priorities than preventing Middle Eastern and Sri Lankan asylum seekers from trying to get to Australia,” said Harold Crouch, an emeritus professor at the Australian National University’s School of International, Political and Strategic Studies. “Naturally, Indonesia wants to use its limited resources to meet Indonesian priorities, not Australian [ones].”


Anti-Shi’a Sectarianism Spreads to Malaysia|ASEAN Beat

“Shiism could be regarded as a ‘poison’ that can destroy the harmony and security of the country as what is happening in some other countries, including Iran, Iraq and Pakistan,” Wan Zahidi said, BBC Monitoring reported, citing a report in the Malaysian paper, Berita Harian, one of the country’s oldest papers. The report added that Wan Zahidi said Malaysia should emulate Morocco is severing ties with Iran, and said that “The Shiite teachings must be blocked, just as we restricted the spread of Communism in this country some time ago.”


Yangon, Once Frozen in Time, Inches Forward|NYT

Since the country began moving toward democracy two years ago, Myanmar’s leaders have freed hundreds of political prisoners, eased censorship, passed landmark telecommunications and investment laws, and taken steps to stabilize the currency, the kyat. In Yangon, architecture and development firms began to reshape the city’s low-rise skyline, while former political prisoners ran for office and once-censored poets emerged to innovate an already rich literary tradition.

Small Sanitation Project in Myanmar Has Big Impact on Community Life|ADB

A $50,000 pilot sanitation project in Myanmar shows that local infrastructure and services can be developed by communities and city governments in the informal settlements where they’re most needed.

Central Bank Confirms $7.6B in Burmese Funds Held in Overseas Accounts|The Irrawaddy

“We only keep $7.6 billion [abroad] legally,” he told reporters. “These are foreign exchange reserves; it includes national [government] budget funds as well as privately-held accounts.” “We use it when needed,” the bank chairman said, adding, “We don’t know about the $11 billion that people are talking about.” Kyaw Kyaw Maung declined to specify in which offshore locations and banks the $7.6 billion in Burmese funds were held. He also failed to clarify exactly how much of these funds were government-owned and how much was in private company hands.

Burma Military Chief Discusses Dawei Project with Thai PM|The Irrawaddy

Burma’s military chief met with Thai Prime Minister Yingluck Shinawatra earlier this week in Bangkok, where they reportedly discussed border narcotics issues as well as investment projects, including the multi-million dollar Dawei deep-sea port project. Snr-Gen Min Aung Hlaing, commander-in-chief of Burma’s armed forces, also attended a meeting in the Thai capital with high-ranking Thai military officials. He was accompanied by Burmese military officials including Gen Hla Htay Win, chief of the general staff of Burma’s armed forces. In the meeting with Yingluck on Tuesday, Min Aung Hlaing said he was “grateful to Thailand for taking part in the development of democracy in his country,” according to the Bangkok Post, quoting Thai government spokesman Teerat Ratanasevi.


Philippine President Calls on Rebels to Surrender| The Irrawaddy

The Philippine president called on the last rebel holdouts holding residents hostage in coastal communities in the south to surrender Thursday and prevent further bloodshed as a major government offensive to end an 11-day standoff crawled toward an end. More than 200 Moro National Liberation Front rebels stormed five communities on the coastal outskirts of Zamboanga city on Sept. 9 and took about 200 residents hostage. A ground, sea and air offensive by 4,500 soldiers and police has left about 40 insurgents holding around 20 hostages, officials said.

Life Picks Up as Filipino Troops Corner Rebels| The Irrawaddy

Life in a southern Philippine city at the center of a hostage crisis is slowly returning to normal, as troops went house-to-house Wednesday searching for the remaining Muslim rebels and their hostages in a 10-day standoff that displaced more than 100,000 people. As the worst fighting in years between Muslim rebels and government troops eased, the military warned the rebel holdouts that they faced two choices: surrender unconditionally, or “suffer the consequences and feel the weight of the suffering of so many innocent people in your hands,” said military spokesman Lt-Col Ramon Zagala.


EU, Singapore Conclude Far-Reaching Trade Deal|The Irrawaddy

The European Union and Singapore submitted for approval on Friday one of the world’s most comprehensive free trade agreements, which the EU sees as a stepping stone towards a wider deal with Southeast Asia. The chief negotiators of both sides presented the entire text of the agreement on Friday after initialing each page of the roughly 1,000-page document. Subject to approval in Singapore and by the 28 EU member states and the European Parliament, the agreement should enter into force in late 2014 or early 2015.


Thailand Opposition Behaving Badly|ASEAN Beat

Early this month, Democrat MP Chen Thaugsuban threw chairs inside the session to show his disgust over the ruling made by the deputy speaker. Chen was asking for an update about the clashes between the police and protesting rubber farmers in south Thailand but other MPs wanted to adjourn the session. Fortunately, no one was injured when Chen threw several chairs in the direction of the deputy speaker.

Increase in smuggling of rare rosewood behind clashes| The Nation

Extensive illegal felling of rare “Phayoong” or Siamese rosewood trees and the smuggling of the wood has resulted in violent clashes between loggers and forest rangers, a senior Department of National Parks, Wildlife and Plant Conservation official said recently.

Central bank sets infrastructure development as the country’s priority|The Nation

The Bank of Thailand (BoT) on Thursday urged the government to elevate the country’s infrastructure so as to improve the country’s cost of living standard and competitive edge.


Russia’s Growing Ties with Vietnam|The Diplomat

Russia’s policies in Southeast Asia often pass without a great deal of remark. But missing the latest twists and turns in Russia’s relationship with Vietnam risks a failure to grasp key elements of the way in which these two important Asian actors are responding to China’s rising power and to trends in Asian security. Although Sino-Russian ties are deepening, at least in the context of the United States, in Southeast Asia Russia has in fact quietly but openly resisted Chinese encroachments and is forging a deeper military-political relationship with Vietnam.

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