Showing posts with label Chinese Influence. Show all posts
Showing posts with label Chinese Influence. Show all posts

Wednesday, 12 October 2011

US making strategic bet on India


WASHINGTON, Oct 11: The future of world politics will be decided in the Asia-Pacific region, not Afghanistan or Iraq, and the United States will be right at the centre of the action, says US Secretary of State Hillary Clinton in an article she has written for the November issue of the prestigious Foreign Policy magazine.
In the 5,500-word article, Secretary Clinton reviews the challenges that the United States is likely to face in the near future and concludes that real changes are taking place in the Asia-Pacific region, not in the Pak-Afghan region.
She also places India in the Asia-Pacific region, pointing out that the US “is making a strategic bet on India`s future”.
“As the war in Iraq winds down and America begins to withdraw its forces from Afghanistan, the United States stands at a pivot point,” she writes.
“Over the last 10 years, we have allocated immense resources to those two theatres. In the next 10 years, we need to be smart and systematic about where we invest time and energy.”
One of the most important tasks of American statecraft over the next decade, she argues, will be to “lock in a substantially increased investment — diplomatic, economic, strategic, and otherwise — in the Asia-Pacific region”.
She notes that the Asia-Pacific has become a key driver of global politics, includes many of the key engines of the global economy, and is home to several of key US allies and important emerging powers like China, India, and Indonesia.
“The time has come for the United States to make similar investments” in this region as it did in Europe after the World War II, she argues. “Harnessing Asia`s growth and dynamism is central to American economic and strategic interests” as the region provides the United States with “unprecedented opportunities for investment, trade, and access to cutting-edge technology”.
The rapid transformations taking place in the region, she writes, underscores “how much the future of the United States is intimately intertwined with the future of the Asia-Pacific”.
She proposes a six-point strategy for staying engaged with the region, which includes maintaining political consensus and helping protect defence capabilities and communications infrastructure of US allies, particularly from non-state actors.
Describing China as one of the most prominent emerging partners in the region, she notes that the US has stayed engaged with China on all key issues, including the war in Afghanistan and on the situation in Pakistan. “The fact is that a thriving America is good for China and a thriving China is good for America. We both have much more to gain from cooperation than from conflict,” she argues. The US, she says, is also committed to working with China to address critical regional and global security issues.
Stressing the need for both the US and China to remain honest about their differences, Secretary Clinton writes: “At the end of the day, there is no handbook for the evolving US-China relationship. But the stakes are much too high for us to fail.”
India, she argues, is another key emerging power with which the US will work closely as the relationship between India and America will be one of the defining partnerships of the 21st century, rooted in common values and interests.
“There are still obstacles to overcome and questions to answer on both sides, but the United States is making a strategic bet on India`s future — that India`s greater role on the world stage will enhance peace and security,” she adds. Opening India`s markets to the world will pave the way to greater regional and global prosperity.
Indian advances in science and technology, she notes, will improve lives and advance human knowledge everywhere, and India`s “vibrant, pluralistic democracy will produce measurable results and improvements” for its citizens and inspire others to follow a similar path of openness and tolerance.

Tuesday, 11 October 2011

Financial Times: Beijing intervenes to help stabilise banks


High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. The Chinese government will boost its stakes in the country’s largest banks, as it attempts to shore up slumping financial stocks and to restore investor confidence.
Central Huijin, the domestic arm of China’s sovereign wealth fund, will purchase shares in Agricultural Bank of ChinaBank of ChinaChina Construction Bank and Industrial and Commercial Bank of China, the official Xinhua news agency announced on Monday. Xinhua added that the purchases by Huijin – its first such public intervention since a similar decision at the onset of the financial crisis three years ago – would “support the healthy operations and development of key state-owned financial institutions and stabilise the share prices of state-owned commercial banks”.
The announcement came too late for the Chinese stock market, which had closed at a 30-month low, but had an immediate effect on late trading in Hong Kong. ICBC’s Hong Kong-listed shares, which had been down 3 per cent, rallied to close up 1 per cent. Analysts said the sharp rebound may have partly reflected short covering. Chinese bank shares have fallen 30 per cent during recent months.
“They [Huijin] are trying to signal to the market that they feel confident,” said Sanjay Jain, a Chinese bank analyst with Credit Suisse. “And of course valuations are depressed, so it’s not a bad idea to buy at these levels for a long-term strategic investor.”
Although Chinese growth has so far held up well, the European debt crisis and fears of a double-dip recession in the US have cast a shadow over the country’s economic prospects. With inflation running near three-year highs and debt levels swollen by heavy spending, economists doubt that Beijing can launch another massive stimulus programme, as it did when the global financial crisis struck in 2008.
Beijing also allowed the renminbi to record its biggest one-day gain in years on Monday. It rose 0.6 per cent against the dollar, squeezing traders who have been betting that the currency will weaken in tandem with a slowing economy.
The motivation for the sudden appreciation appeared to be diplomatic. The US Senate is poised to vote on Tuesday on legislation that would punish China for deliberately undervaluing the renminbi.
The government, by means of Huijin, is already the majority shareholder in all of the country’s important banks. The Xinhua announcement gave no details about how many more shares the fund intends to buy.
Investors have turned against China, driving down commodity prices and dumping Chinese bank shares. Global investors worry that bad debt levels will soar because of a lending spree that began in 2008. To short Chinese bank shares in Hong Kong has become a popular play for investors betting that the world’s fastest-growing major economy will soon slow.

China plans new economic zones in Xinjiang border towns


BEIJING: China announced on Saturday that it plans to use subsidies and tax incentives to build two new economic zones in the far western region of Xinjiang, to open up the landlocked west and boost trade with Central and South Asian neighbours.
In a detailed policy outline posted on the central government’s website (www.gov.cn), the State Council, or cabinet, aims to “basically complete” infrastructure for economic development zones (EDZ) at Kashgar and Khorgos.
China aims to complete infrastructure for economic development zones at Kashgar and Khorgos.
Xinjiang is strategically vital to China, accounting for one-sixth of the country’s land mass and rich in oil, gas, coal and other mineral resources. It borders Russia, Kazakhstan, Pakistan, Mongolia, Kyrgystan, Tajikistan, Afghanistan and India, and is a politically sensitive region as many Uighurs, a Turkic-speaking Muslim people native to Xinjiang, resent Chinese controls on religion, culture and language.
Electronics, textiles, metallurgy and renewable energy manufacturing would be key areas for development in Kashgar, an oasis in south-western part of Xinjiang, the statement said, while Khorgos would focus on chemicals, farm products and pharmaceuticals.
“By 2020, the two economic zones would see a great leap in competitiveness in these industries and overall economic strength,” the statement said. Khorgos, already an entry point of the landmark Turkmenistan-China natural gas pipeline, has also won government approval to become an import point for and automobiles.
The government also plans to encourage Chinese and international airlines to open new routes to neighbouring countries and speed up construction of rail lines linking Xinjiang with Uzbekistan and Pakistan, the statement said.