Under the Radar News 02.27.12

Posted on Tuesday, February 28, 2012 by Ai-Shan Lu

A weekly compilation of events in Asia.

  • China’s largest oil producer, China National Petroleum Corp (CNPC), is increasingly concerned about political risks in the Midler East and North Africa. CNPC is reportedly establishing an industrial park in Dubai’s “Free Zone.” According to the Chinese media: “CNPC will use the park as an equipment store in the event of an emergency withdrawal from the Middle East and North Africa.”

  • According to the Brussels-based Global Wind Energy Council, global wind power generation capacity has surged 21% from a year before and at the current rate it will surpass global nuclear power output within five years. Even though faced with severe economic conditions, developing countries in Asia, South America and Africa have increased their wind power capacity in 2011 and so did Germany and Britain.

  • On February 21, Pakistani Interior Minister Rehman Malik informed members of the Sindh (Bhutto's home province) Assembly that former president Pervez Musharraf would be arrested to face trial in the former Prime Minister Benazir Bhutto assassination case.

  • During the meeting of Group of 20 (G-20) finance ministers in Mexico City on February 26, India proposed establishing “BRICS Development Bank,” which will be funded by developing countries since existing multilateral lending bodies have not funded developing nations effectively.

  • The free trade agreement between South Korea and the United States (KORUS-FTA) will go into effect on March 15. Yet, controversies remain among South Koreans as protests against the agreement continue. South Korean President Lee Myung-bak argues that the FTA will increase exports to the United States and create more jobs; however, opposition parties said that the deal will hurt the country’s rural economy.

  • Taiwan’s Navy confirmed that a domestic submarine program will begin next year. The Navy reportedly sought support for the budget from legislators in the Legislative Yuan’s Foreign Affairs and Defense Committee. According to the local media, three countries have expressed interest in either helping Taiwan manufacture its own submarine prototype or selling ships recently decommissioned from their own fleets.

  • Beijing’s preferred candidate for Chief Executive of Hong Kong, Henry Tang, is facing growing public pressure to end his political campaign after it was revealed that he leased a luxury property in Shenzhen without declaring it to the Executive Council. Tensions between Hong Kong people and mainlanders have intensified this year as the election heats up.
  • The Wukan Effect

    Posted on Friday, February 24, 2012 by Ai-Shan Lu

    By Ai-Shan Lu

    Wukan—a small fishing village in Guangdong Province along the South China Sea—has been the darling of international media ever since an angry throng of villagers smashed several village office windows and even attacked the local police station on September 21, 2011. Following a five month long standoff between protestors and local police, on February 1, provincial authorities permitted Wukan to hold an election and select members to form an election committee. The eleven-member committee will organize and supervise the upcoming village chief election, scheduled for March 1. While the election committee has been the object of recent focus, a closer look at the political jockeying that has taken place between the local and provincial and local and central leadership may prove more instructive of the incident’s wider implications. So what can the “Wukan effect” tell us about the relationship between local, provincial and central officials?

    In September 2011, villagers in Wukan first took to the streets to protest the low compensation for farmland requisition and then they established “Wukan Village Temporary Council Committee”, which was constituted to negotiate with the Lufeng municipal government. Scuffles broke out between local police and demonstrators, and the conflict quickly spiraled out of control when one of the board members of the temporary council committee, Xue Jinbo, died in custody owing to heart disease. A breakthrough came about when Guangdong’s Party Secretary Wang Yang, instead of brutally suppressing the strikes, allowed villagers to hold elections. People’s Daily, the flagship newspaper of the Chinese Communist Party (CCP) praised his moral authority. Secretary Wang, who is generally viewed as relatively more liberal among China’s political cast, described the Wukan Incident as both “accidental and inevitable.” Presumably, what Wang meant is that the incident was “inevitable” because China’s economic and social development left many problems unaddressed, particularly in the rural areas and “accidental” in the sense that the government’s social and economic policies were intended to reach urban and rural areas; coastal and inland peoples, and bring prosperity to all of China. Wang believed that the government should act “responsibly” [ed. emphasis added] and that the administration must deal with such conflicts directly. Consequently, he established a provincial-level working group under the leadership of Guangdong’s Vice-party Secretary Zhu Mingkuo. According to Wang, “the provincial working group in Wukan will not only ‘settle’ the incident, but it will also provide reference to improve village-level administrations in Guangdong.”

    In sharp contrast to Wang’s handling of the dispute, local government officials in Shanwei and Lufeng first labeled the incident as a “riot incited by foreign subversives.” In line with this thinking, the Financial Times quoted an unnamed senior Chinese leader stating: “it would be better for a clear directive from the central authorities to over-react rather than to fall short.” According to a member of the Chinese People’s Political Consultative Conference, other provincial officials complained that Mr. Wang set a terrible precedent since other people in protests could demand a similar response.

    Yet, most Chinese news reports extolled the peaceful resolution of the incident. Perhaps inspired by what happened in Wukan, villagers in Guangzhou (capital city of Guangdong) and Wenzhou in Zhejiang reportedly demonstrated against their respective villages’ party secretaries and accused them of corruption. A “Wukan Effect” appears to be materializing. Optimists argue that Wukan provides a democratic model for China because it allows villagers to organize local elections for new village leadership in a process that is not entirely controlled by the CCP. More importantly, the Wukan model could serve as a useful mechanism for the peaceful resolution of the growing number of disputes between local officials and citizens in rural areas. Interestingly, there are in fact very few pieces of news about village protests reported by Chinese official media and nor did provincial party secretaries make any comments.

    During a visit to a village in Guangzhou on February 4, China’s Prime Minister Wen Jiabao proclaimed that “farmers’ rights must be protected,” and in response to widespread dissatisfaction with local officials Wen emphasized the importance of “maintaining direct elections at the village-level”. Prime Minister Wen’s statements were widely seen as an indication of high-level support for Wang’s practice in Wukan. So does the government’s handling of the Wukan incident indicate that the CCP’s top echelon is becoming more open-minded toward democracy? Although protests against village officials occurred in several rural villages following the Wukan incident, none successfully appealed for direct elections to replace incumbent village chiefs (as in Wukan). So Wukan appears to be more of an exception rather than the rule thus far. In fact, most uprisings were suppressed by local governments except any provincial intervention. Yet as China continues to economically develop, the concomitant growing political pressure on the political leadership raises the interesting question of whether the central government will grant provincial governments permission to handle protests against village officials’ corruption by holding direct and impartial elections.

    Image: Ballot boxes in Wukan
    Source: China Youth Daily

    Under the Radar News 02.20.12

    Posted on Wednesday, February 22, 2012 by Ai-Shan Lu

    A weekly compilation of events in Asia.

  • Unipec, a Chinese state-owned oil company, renewed its supply contract with National Iranian Oil Co. (NIOC) on February 18. Therefore, NIOC will increase oil exports to China to 500,000 barrels per day after a decline in Iranian crude exports to China earlier this year. The renewal appears as a snub to the international community’s efforts to isolate Tehran for its nuclear ambitions.

  • South Korea is reportedly planning to establish a pilot training center in Portugal and will deploy the T-50 supersonic military jet trainers produced by Korean Aerospace Industries (KAI). South Korea is attempting to attract international attention to its aerospace industry (Indonesia has ordered 16 T-50 Golden Eagle advance jet trainers from KAI.).

  • China’s Vice President Xi Jinping and U.S. Secretary of Defense Leon Panetta emphasized the necessity of strengthening military relations between the two powers after talks at the Pentagon on February 14. Xi "urged both sides to maintain and strengthen practical exchanges and cooperation between the two militaries," while Panetta suggested humanitarian assistance and counter-piracy efforts "as productive areas for deepening cooperation," according to Pentagon spokesperson George Little.

  • On February 13, U.S. business entities signed three memorandums of understanding (MOU) with Yonker Environment Protection Institute (Yonker EPI), whose mission is to develop and commercialize advanced environmental technologies in China. The first and the second MOUs focus on cooperation in water technologies and the latter also includes utility management. The third MOU is mainly about providing technology for solid waste gasification in China.

  • Israel accused Iran of being involved in a bombing attack on an Israeli vehicle in New Delhi. The Indian government, however, has refused to take actions against Iran unless there is concrete evidence to prove Iran’s involvements in the attack.

  • Masaaki Shirakawa, who is the governor of Bank of Japan (BOJ), said that the Japanese economy is headed toward a moderate recovery but the outlook remains highly uncertain. The director of macroeconomic analysis at the Cabinet Office, Minoru Masujima, also said that domestic demand was relatively firm. Yet, records of January exports seemed to be less promising due to the strong yen and the euro zone debt problems harming overseas demand.
  • Afghanistan's Transition in Jeopardy

    Posted on Tuesday, February 14, 2012 by Isabella Mroczkowski

    By Randall Schriver and Isabella Mroczkowski

    In June of last year President Obama announced that he would withdraw the 33,000 surge troops from Afghanistan by the end of this summer, setting in motion a series of timelines underscored by Secretary Panetta’s recent statement that the United States military would seek to end combat operations at some point next year. The pace and the scope of this withdrawal and end to the U.S. combat role has been a subject of intense debate. In contrast, experts across the ideological spectrum have agreed that developing the capacity, capability and competence of Afghan security forces is key for a successful transition and sustainable peace in Afghanistan.

    Therefore, it is especially troubling to hear that the NATO Training Mission in Afghanistan (NTM-A), which is the military command responsible for training and advising Afghan security forces, may be targeted for deep cuts beginning in Fiscal Year 2013. By all accounts, the Afghan National Army (ANA) and Police (ANP) are not prepared to meet internal security challenges alone. Such a decision, if put into effect, would by all appearances be counter-intuitive.

    As outlined in a recent Project 2049 Report entitled The Police Challenge: Advancing Afghan National Police Training , the mission has been difficult, the challenges numerous and the results mixed. However, the NATO training command, working with its Afghan partners, has demonstrated an ability to adapt and move forward making slow and steady progress in recent years. Given pressing budget demands, we must be careful not to be penny-wise and pound-foolish by unnecessarily putting these gains at risk.

    In addition to providing an overview of the existing training methodologies and identifying areas of concern, the Project 2049 report contained a series of specific recommendations that highlighted the need to not only maintain current activities, but in fact to intensify and increase the overall training effort. In tracking training activities since the report was issued, the working group has noted that the command has tackled quantitative issues such as low recruitment numbers, but more importantly has also honed in on qualitative challenges related to institutional reforms and human capital.

    While real progress has been made, there are still an insufficient number of mentors and trainers to meet the training requirements. In interviews with the Project 2049 Working Group, government officials consistently cited the presence of qualified mentors as a key factor in improving individual and unit level performance. Force or funding reductions in the training program would require eliminating existing mentor positions and further exacerbate the challenge of developing professional, capable and respected security forces.

    Director of National Intelligence James Clapper in his January 31, 2012 testimony to the Senate Select Committee on Intelligence regarding the Worldwide Threat Assessment of the U.S. Intelligence Community noted: “ISAF partnering and mentoring have begun to show signs of sustainable progress at the tactical and ministerial levels; however, corruption as well as poor leadership and management will threaten Afghan National Security Force’s operational effectiveness.”

    As we debate the pace and shape of the drawdown we should agree that a robust training program of the Afghan forces must continue for several years beyond the currently discussed timelines. Furthermore, NATO will need to provide the necessary manpower and financial resources to sustain these activities.Well-trained and trusted security forces will reaffirm the legitimacy of the Afghan government and provide for the security and stability Afghanistan will need long after the combat role of international forces draws to a close.

    Image: ANP instructors stand alongside NATO Training Mission
    Source: DVIDS

    Under the Radar News 02.13.12

    Posted on Monday, February 13, 2012 by Ai-Shan Lu

    A weekly compilation of events in Asia.

  • During a three-day visit to China, Indian External Affairs Minister S.M. Krishna held talks with Zhou Yongkang, China's ninth-highest ranked politician and the CCP Central Committee Politburo Standing Committee member. The meeting reportedly laid out a new roadmap for Sino-Indian bilateral relations.

  • Burmese Press Scrutiny and Registration Department (PSRD) loosened its grip on media censorship and journalists are being released from prisons. Also, reports on the country’s democracy icon, Aung San Suu Kyi, are no longer taboo subjects in the local press.

  • Under a Preferential Trade Agreement (PTA) signed between Indonesia and Pakistan last week, tariffs on more than 500 commodities traded by the two countries will be reduced. The PTA ratification and technical preparation for the tariff reduction is expected to be completed in three months. As the world’s largest crude palm oil (CPO) producer, Indonesia expects to increase its exports of CPO to Pakistan.

  • A special committee on climate change in the South Korean National Assembly—the eighth-largest carbon emitter in the world—voted to impose greenhouse-gas restrictions on the country’s largest companies. The bills, however, are being opposed by large manufacturers, claiming that their cost will boost and hence make exports less competitive.

  • According to a survey of 1,791 farmers conducted by the Seattle-based Landsea Rural Development Institute, more than half of Chinese farmers are dissatisfied with rural policies. The Institute concluded that 43.1% of villages had experienced "takings of land" for commercial uses since the late 1990s, moreover, that these incidents increased dramatically from 2007.

  • During a panel on "America, Europe and the Riseof Asia" at the 48th Munich Security Conference, Chinese Vice Foreign Minister Zhang Zhijun stated that military alliances have no role in Asia and reiterated China’s policy of strengthening friendship with its neighboring countries. FM Zhang also condemned foreign influence on China’s domestic affairs and emphasized that “the development of both the East and the West is not a zero-sum game”.

  • The U.S. will reportedly decrease defense budget by deploying marines abroad on a rotating basis. According to a South Korean government source, Washington is considering to redeploy some of its marines from Okinawa to Korea. South Korean President Lee Myung-bak is reportedly concerned about possible opposition from China and North Korea against U.S. redeployment.
  • China's Arctic Century?

    Posted on Friday, February 10, 2012 by Isabella Mroczkowski

    By Isabella Mroczkowski

    The United States is shifting its focus from the Atlantic across to the Pacific. However, if an Arctic century is on the horizon, then China is at the forefront of it. While Washington enhances its relationships across the Asia-Pacific basin, Beijing is busy engaging Arctic Ocean coastal states en masse. The Middle Kingdom is apparently interested in the commercial viability of new shipping lanes and developing the resources that lie underneath and along the Arctic seabed. Ostensibly to achieve its objectives, China is engaging the region at an unprecedented pace. Beijing’s comprehensive engagement of Arctic states demonstrates that China’s ambition is not just to be a Pacific power, but a global one. Questions that remain are: what is Beijing’s intention in the Arctic, and by extension what type of global power will China be?

    China has been in the Arctic since the early 1990s,but only recently began seeking to enhance its engagement there as a permanent observer in the Arctic Council. The Arctic Council is a high-level intergovernmental forum that addresses issues such as the management of resources, climate change, and Arctic environment maintenance.The Council has eight voting member states—Canada, United States, Russia, Denmark (Faroe Islands and Greenland), Norway, Iceland, Sweden, and Finland—all of which share a border with the Arctic Ocean. There are six permanent observer states—all of which are European—and multiple ad-hoc observer members, among them: Japan, South Korea, and China. While permanent observer status would grant China unrestricted access to Arctic Council meetings (as an ad-hoc member it must apply for admission each time), under the current system, China’s accession would serve more as a symbolic gesture than one that grants China tangible authority.

    One example that demonstrates a Chinese approach to the Arctic is Chinese tycoon Huang Nubo’s bid to purchase 300 sq km of land in northeast Iceland (roughly .3% of the country) for an eco-resort.While his efforts are ‘allegedly’ unaffiliated with the Chinese government, the deal would grant China a significant foothold in the Arctic. The land in question is strategically located near one of Iceland’s largest glacial rivers and several potential deepwater ports.As Arctic ice recedes this area is destined to become an important port center on a new maritime transport route between East and West. The government of Iceland ultimately rejected Mr. Nubo’s resort proposal, but not first without stirring a heated debate between Icelanders about China’s growing influence.

    In contrast, Copenhagen and Beijing elevated their relationship to that of a “strategic partnership” in 2008 to include cooperation in technology, science, and trade. Denmark made the tactical decision to prioritize its economic relationship with China while turning a blind eye to issues such as human rights.To be sure, this burgeoning bilateral relationship holds enormous economic benefits, not only for Denmark, but also for Greenland, which remains under Denmark’s jurisdiction.

    Greenland is endowed with substantial deposits of minerals including rare earths, uranium, iron ore, lead, zinc, petroleum, and gemstones. Currently 80 percent of Greenland is covered by an ice sheet. However rising temperatures have exposed numerous mineral belts. One such area, the Kvanefjeld deposit, is estimated to produce 20 percent of the global rare earth supply, making it the world's second-largest deposit of rare earths.With limited fiscal resources, Greenland depends on outside investment to develop its mineral reserves. While the Australian-based Greenland Minerals and Energy Limited has been operating in Greenland since 2007, new entities seek to tap into Greenland’s emerging minerals industry. China’s Sichuan Xinye Mining Investment Co. recently held preliminary discussions on investing in an iron ore deposit site and Jiangxi Union Mining has explored for copper in central Greenland.While the two entities are in the first stages of negotiation, a cooperative agreement is on the horizon.

    Unlike the transitory eco-resort proposal and emerging investments in Greenland’s mineral reserves, China’s Yellow River Research Center in Ny- Ă…lesund, Norway represents a different type of Chinese footprint in the Arctic. For almost a decade, the station has been collecting environmental, oceanic, and scientific data for research primarily on climate change. However, while Norway hosts China’s Yellow River research station, it has not bought into China’s Arctic courtship. Ever since the Norwegian Nobel Committee awarded the 2010 Nobel Peace Prize to Chinese dissident Liu Xiaobo, diplomatic and trade ties have stagnated. Today, Norway remains one of the most vocal Arctic Council members against Chinese membership on the Council.

    Another important player in China’s future position in the Arctic is Canada. In 2013, Canada will take over the chairmanship of the Arctic Council and thus set the Council’s agenda for the following two years—including which members to admit. Thus far, China – Canada relations appear to be on an upswing. In early February, PetroChina China’s largest oil and gas producer and distributor, purchased a 20 percent stake in Royal Dutch Shell’s Groundbirch shale-gas asset in Canada, granting it vast access to Arctic fossil fuels. While Groundbirch will continue to supply customers in North America, in the future, (perhaps as Arctic ice recedes and sea lanes open up) PetroChina seeks to export the fuel to Asia in the form of liquefied natural gas (LNG).China’s value to Canada has increased, especially with the U.S. – Canada Keystone stall. Prime Minister Stephen Harper has reaffirmed his intentions to pursue potential energy partners in Asia and notably, energy has been the focal point in Prime Minister Harper’s February visit to China.

    China’s approach to the Arctic is comprehensive. While Beijing continues to seek a role in the region’s governance with membership in the Arctic Council, it is also engaging with Arctic stakeholders bilaterally on a gamut of issues that includes: trade, culture, investment, tourism, and technology. This begs the questions, what are Chinese intentions in the Arctic and what does Beijing’s approach suggest about the strategy toward the Arctic?

    In the preliminary analysis, Chinese interests and strategy in the Arctic appear at odds. Ruan Zongze, a research fellow with the China Institute for International Studies—a Ministry of Foreign Affairs think tank—asserts that as a country outside the Arctic, China has no “special interests” in the Arctic.
    On the other hand, retired Rear PLA Navy Admiral Yin Zhuo believes that the Arctic belongs to all people and that China must have a share in the region’s resources.While China’s intentions remain at odds, that fact remains: Arctic ice cover is vanishing with astonishing speed; ice melt will open up valuable shipping lanes, possibilities for hydrocarbon extraction, and economic opportunities ranging from fishing to tourism. Meanwhile, Beijing’s ambitious plans for three Arctic expeditions and a second polar ice-breaker ship by 2015,confirm that China is in the Arctic to stay. The economic giant’s reach into the Arctic suggests that China is not just a Pacific Power but a global one.

    Image 1: China's Arctic research expedition arrives at North Pole, Xinhua
    Image 2: Chinese View of Arctic Sea Routes, Chinese Arctic and Antarctic Administration

    Isabella Mroczkowski is a Research Assistant at the Project 2049 Institute.

    Under the Radar News 06.02.12

    Posted on Tuesday, February 7, 2012 by Ai-Shan Lu

    A weekly compilation of events in Asia.

  • The Indian government has selected the French Rafale aircraft for its 126 fighter plan. The decision to go with Rafale instead of the Eurofighter Typhoon came as a disappointment to British Prime Minister David Cameron, who claimed that the Eurofighter is “superior” to Rafale. Consequently, his administration will try to encourage India to reconsider the deal with Dassault, which produces Rafale.

  • Wukan, a small finishing village in Guangdong Province, held an election by on February 3, 2012 in order to settle disputes between villagers and local officials over disputed land deals. The election was generally viewed as a potential sign of China’s grass-roots political reform.

  • Thailand has become the first country to support Twitter’s controversial new censorship policy. Social media giant, Twitter, announced last week that it will impose country-specific censorship on tweets that violate local laws. Thailand enforces some of the strictest censorship laws in the world to prevent defamatory or threatening comments on the royal family.

  • As Iran’s second largest oil client after China, India rejected calls for sanction against Iran. Moreover, a business group from India will reportedly be sent to Tehran to discuss how India can increase exports so as to pay for its growing oil demand.

  • According to the data released by the General Statistics Office in Hanoi, Vietnam’s trade deficit decreased in January 2012 from December 2011. Analyst believe that the improving trade balance may increase confidence in the Vietnamese currency (dong). Central bank Governor Nguyen Van Binh said that “Vietnam targets a balance-of-payments surplus of $3 billion in 2012 and enough foreign-exchange reserves to cover 12 to 15 weeks of imports by 2015.”

  • The local government in Okinawa is reportedly stepping up effort to develop closer economic ties with China. A Japan-China friendship association in Okinawa Prefecture and the Association for Friendship with Foreign Countries, Inner Mongolia agreed to promote the cause of rare earth metals in Inner Mongolia Autonomous Region. Local officials in Okinawa hope the collaboration will attract more high-techs companies to build manufacturing plants in the prefecture.
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