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East Asia

The Asian Square Dance – Part VIII

Michael Akerib

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The economy

Economists generally agree that the cumulative economies of China and India will be larger than that of the G7 by 2030. At present, China’s GCP stands at $9.2 trillion, or nearly 5 times that India.

The two countries have taken very different economic paths. China has chosen to become an exporter of labor-intensive products while India still relies on agriculture and services, particularly in IT.

Russia’s GDP at $2 trillion in 2013, and expected to shrink by 3 to 5% in 2015, less than a quarter of China’s. Russia is a raw material powerhouse and a manufacturing dwarf. As such it should be a natural supplier of oil and gas to China – it is a closer supplier than the Middle East. However, the pipeline that will be built across Siberia will deliver its goods to Nakhodka, a port facing Japan. Russia seems to fear that it will become dependent on China for its gas exports and that China will consider Russia as a vassal state and sideline it on the international scene as the disparities between the two countries grow. China has also to date not given a definite reply to the role Russian gas will play in its energy policy. Price is also an issue since China tends to compare the price of gas with that of domestic coal.

While economists forecast that China’s GDP will overtake that of the US, it still has some way to go as US GDP stands at $15 trillion.

By building its extremely large dollar reserves, $4 trillion, the Chinese Central Bank has allowed the US to borrow at very low interest rtes and has created a situation in which banks have searched for higher yields through lending massively to the housing market. The risk on the currency and on the value of US Treasury paper is extremely large. It is estimated that China holds over 6% of the US debt.

China could, if it so wished, put pressure on the US economic system by buying less US debt, or even selling it, thus precipitating a fall in the dollar and an increase in interest rates. Reprisals from the US could come in the form of new barriers to trade for products made in China.

Should there be a major economic recession in the US, with a consequent loss of jobs, the country may well turn to protectionism. The idea that the globalization process has been essentially beneficial to China will be a driver to reduce imports from that country.

China is also worried that US government borrowing to cover its enormous deficit will lead to high inflation and that therefore the bonds held by the Central bank will lose value.

The US has been putting considerable pressure for China to revalue its currency, the RMB, and thus reduce its competitive advantage based on cheap labor. Some economists, however, believe that a revaluation of the currency may well lead to precisely the opposite effect as funds may then float out of the RMB and into other currencies, thus leading to a de facto devaluation.

The fall of the dollar has revaluated the RMB and thus made Chinese exports more expensive, hurting mostly privately-owned SMEs and halting the modernization process of the economy. The US could allow its currency to depreciate further, to the point where its goods would be significantly more competitive than they are today.

China could take advantage of a weaker dollar to acquire assets denominated in dollars, whether in the US or in other countries. It has thus become a major lender and investor in South America – particularly in Ecuador, Nicaragua and Venezuela where it has committed to invest $250 billion over the next 10 years. This might well be the reason for the US to have softened its stance towards Cuba.

China could also use its reserves to acquire major European corporations in the hope that they will out-compete US companies thus creating an economic war between the US and the EU. It could also use its vast financial reserves to hoard oil and uranium forcing prices of these products to reach new highs.

China feels that the US administration under President Obama has not delivered on its pledge of including China, and other emerging countries, into major economic decisions. Thus, the Obama administration has put pressure on its allies in the Asia-Pacific area to stay away from the Asia Infrastructure Investment Bank, one of China’s pet projects.

As of Japan’s GDP at $5 trillion stands also at four times that of South Korea.

Trade and investment

Asia is in a unique tradition with several world powers sitting on a nuclear arsenal and harboring resentments and old, deep rooted hatreds and territorial disputes. Military budgets are on the rise and economic growth has slowed considerably. Competition exists between the countries we have been considering in this series of articles – it exists in the industrial world, in cyberspace and in outer space.

Asia’s history is one of constant conflicts and long-seated hatred and there are too many potential conflicts that threaten to erupt into wars. There is also a seeming disdain of leaders towards their own people, the most flagrant case being North Korea.

There is also a major gender imbalance in favor of men and this situation has led to fears of a rise in militarism. There is contradictory evidence that unmarried men tend to be more violence-prone than married man.

Almost all the countries covered have strong economic interconnections.

India runs a major trade deficit with China which in 2013 was of over $ 30 billion, with India complaining that Chinese goods take advantage of a whole series of measures put in place by the Chinese government while Indian companies have problems entering the market.

Similarly, Indian companies have had problems entering the Japanese market, but due to quality issues.

With the opening of the Indian economy to foreign investments, Japanese corporations, catching up to a late start, are expected to invest $35 billion over the next 5 years in public-private partnerships. Japan is also expected to become a partner in a major public-private infrastructure partnership project, so large many knowledgeable observers of Indian politics doubt it can be realized, estimated at $100 billion, to create a high technology corridor – the Delhi Metro Industrial Corridor – linking Mumbai to New Delhi. Terrorist attacks have so far frightened would-be investors, however.

China has also been an important investor in India. A sustained economic cooperation between the two countries would make them less dependent on exports to the European Union and to the US.

China has regularly complained about the long delays for India to approve investments by Chinese firms and of a total ban in investments in infrastructure. Chinese workers also have difficulties in obtaining working visas.

Bilateral trade between India and Russia is much lower at $12 billion but after President Putin’s visit, ambitious targets have been set for 2030, essentially in infrastructure projects. Thus, Russia will supply four nuclear power plants.

India’s largest market is the US with bilateral trade between the two countries being of the order of $100 billion with plans to reach $500 billion. The US has thus displaced China as India’s largest trading partner in spite of India’s complaint that US subsidies to cotton farmers undermine Indian exports and that steel exports are unjustly submitted to high tariffs. In turn, the US complains at the difficulties companies face in attempting to enter the Indian market and at the limitations imposed on them when investing.

China and Japan are each other’s largest trade partners, China having replaced the US in that role. Japanese tourists are the main visitors to China. Japan is the major foreign investor in China, taking advantage of low labor costs. However, the tense situation between the two countries, and the increased cost of manpower, has led Japanese companies to sharply reduce their investments.

China is also South Korea’s main trading partner with two-way trade of $230 billion and the signing of a bilateral trade agreement that took effect in February of this year. Koreans are also large investors in China.

China and Russia, in spite of the fact that they are both export-oriented economies, are complementary in that the first is a big consumer of raw materials, primarily energy, while Russia is a major exporter of oil and gas. This has led China to increasingly see Russia as a petro-state with little technological capabilities and unable to pose any type of threat.

Hence, while in the years following the Second World War Russia saw itself dwarfed by the Western economies, the country is, today, overtaken economically by both the West and the East, the latter being represented by China, Japan and South Korea.

In the Chinese-Russian partnership, China appears to be the senior partner and it is safe to say that Russia needs China more than China needs Russia.

Russia sees China as a hedge of its European energy markets. This hedge, however, can only be fully operational in the future as building the right infrastructure that would allow Russia to move its energy exports eastwards is a long-term venture, particularly since Russia’s most productive wells are in the European part of the country while the bulk of China’s population is in the eastern part of their own country.

Two-way trade in 2014 was over $100 billion and while China is Russia’s second largest trading partner, trade with the EU is 4 times that amount. The value of trade is very dependent on the price of oil and gas. It is nevertheless expected to reach $200 billion by 2020.

On completion of the Eastern Siberian Pacific Ocean Oil Pipeline (ESPO), Russia could supply 20% of China’s imports and 33% of Japan’s on condition these two countries choose this dependency.

The two countries have launched the world’s largest joint gas project – the Sila Sibiri pipeline – which will deliver gas to the Russian Far East and to China. There are other joint projects, including in the Arctic, which have received President Putin’s blessing.

Since 2014 commercial contracts between the two countries intensified as Russia was looking for credit and investors in the face of the sanctions imposed by the EU and the US as well as the serious dip in the price of oil. The oil and gas contracts signed between the two countries are, respectively, of $270 and $400 billion over a thirty-year period with Gazprom deliveries due to start in 2019.

Chinese investments in Russia are of the order of $10 billion and new investments have been earmarked for a large variety of projects. The largest investment is a partnership with Rosneft, valued at several billion dollars meant essentially for the Sakhalin-3 block. Rosneft has also secured a $35 billion loan from China in exchange for oil supplies. This envelope is to be used to purchase several smaller oil producers.

China will also invest in a high-speed train between Kazan and Moscow – a $25 billion investment, and other major infrastructure projects are being discussed.

Russia has, in turn, agreed to supply China with the know-how to produce uranium-enrichment facilities and to supply enriched uranium.

Economic ties between China and the US are also important and the interdependence between them appears to be growing rather than slowing in spite of constant mutual accusations of retreating from free trade. The US ran in 2013 a deficit of $318 billion for merchandise trade, one third of the total trade deficit. China is the US’ biggest supplier.

Imports by the US of cheap Chinese products – essentially manufactured goods, machinery, chemicals and transport products – has been of great assistance in controlling inflation and the US has thus transferred to China increasingly large amounts of dollars. Since China is a major supplier of goods to other Asian countries, in particular in South-East Asia, that assemble products for export to the US, the US’ importance to the Chinese economy is even greater than what the above figures show. The US has started a large number of cases against China at the WTO claiming the country is practicing illegally high import tariffs on US goods while simultaneously subsidizing exports. By limiting or banning exports of raw materials, such as bauxite, and allowing prices to climb, China has been accused of developing one more strategy of subsidizing its industry.

Chinese investments in the US are of the order of $50 billion but are dwarfed by the over $400 billion invested by US corporations in China, even though the investment flow has slowed. Statistics in this respect are not meaningful, as often these investments are not reported in US statistics as the flow of funds is channeled through favorable tax havens.

A large number of American firms have established manufacturing facilities in China, and this allowed the US economy to grow with minimal inflation. There is a generally shared belief that China has entered a period of uncertainty, that local competition is adopting a more aggressive stance that in some areas there is over-capacity, that intellectual property is not respected and that the country is increasingly adopting a protectionist stance. Nevertheless, an increasing number of US corporations are dependent on the Chinese economy for their profits and sometimes on products, such as tobacco, whose sales are dwindling in traditional markets.

Also, the US is attempting to sell, in China, alternative energy sources such as solar or wind power technology. This is a major market considering that the Chinese government has announced its intention of investing $200 billion in renewable energies by 2020. US companies, however, are loath to export their latest technology in a country known for closing an eye to the trespassing of intellectual property.

Chinese investments in the US could be even bigger if they were not met by obstacles – the most glaring example being that of Huawei, the telecommunications company, which was blocked from entering the US market.

The Chinese have also become very large buyers of real estate in the US, amassing a portfolio of $22 billion.

The relationship between Japan and Russia is more complex since the two countries have never signed a final peace agreement and Japan still lays claim on the Kurile Islands. Russia is ill at ease with Japan’s future involvement in a missile defense system and has proposed to join the initiative which is led by the US.

Bilateral trade is of the order of $33 billion with oil and LNG taken an important part of this volume, in particular from the Sakhalin deposits. After the Fukushima incident Japan has felt the need to diversity its sources of energy and Russia is a natural supplier. In Russia’s eyes, supplying Japan would counterbalance the increasing dependence on China. Several cooperation agreements to develop new gas and oil fields have also been signed between the two countries.

Total Japanese investments are small, with car makers have plants in Russia, but the most likely investments will target Russia’s Far East, particularly for infrastructures. Several joint ventures have been started in agriculture, energy and infrastructure.

Japan and South Korea are each other’s fourth largest trading partners. Russia has proposed building a railway that would link North and South Korea to the European markets via Russian territory – i.e. connecting to the Trans-Siberian Railway. Such an undertaking would allow South Korea to increase trade with Europe and reduce its dependency on the American and Asian markets.

Bilateral trade between South Korea and the US amounted to $115 billion in 2014 and represented a US deficit of $25 billion. In June 2007, the two countries signed a trade agreement that phases out all tariffs, on consumer and industrial products over a period of three years. Total investments from South Korea to the US is estimated to be $25 billion while US investments in South Korea are of $35 billion.

Bilateral trade between the US and Russia was, in 2014, of $34 billion with a US deficit of $13 billion. Russians are big investors in New York – particularly Manhattan – real estate particularly since the sanctions and the decrease in the price of oil led to a collapse of the ruble. US investments in Russia stand at around $15 billion and are rather diminishing, again in view of the sanctions.

Economic growth has not eradicated poverty in East Asia and estimates of the extremely poor are of the order of 250 million persons. Although continuing economic growth should lead to a reduction in poverty, this should still touch 15 to 17% of the population. The imbalance stems in part by the fact that there is an imbalance between skilled and unskilled labor as well as regional imbalances due to the rapid industrialization of certain areas.

Demography

East Asia is today’s the world’s fastest aging. Projections show 20% of the population over 60 by 2050, or two-thirds of the world’s seniors. Already by 2040, the number of people over 60 will be higher than the people under 15.

Just as China is the world’s most populated country, India is the world’s largest democracy. They are the only two countries with a population larger than 1 billion. It is forecast that sometime between 2015 and 2025, India’s population will have overtaken China’s as the former’s population is growing at twice the rate of China’s population. Furthermore, India’s population has a low average age while China’s is aging. Therefore while India may be considered to have an infinite supply of cheap labor, this will not be the case of China in the mid-term future. Thus, while India’s dependency ratio will improve, China’s will worsen.

China’s population is aging rapidly, partly because of a vastly improved health system. This expanding health care system will require substantial additional funding. So will the pension system even though traditionally, children support their elderly parents.

Both China and India suffer from a growing ratio of males to females. The devotion of the children to their parents, when these age, will be difficult to maintain if single men, due to absence of the brides, migrate in search of employment of opportunities.

As the economies of both countries expand at a similar rate, they will need trained engineers and scientists. China graduates 600 000 engineers per year and India 350 000. However, China has a qualitative advantage due to a better educational system.

Japan’s economy is to a large extent driven by demographic change. Birthrates have collapsed with a total fertility rate dangerously approaching 1. With a life expectancy of 88 years, it has today the world’s oldest population, with the largest number of centenarians, but may well cede this place to China by 2050. By 2025 its population over 80 years of age will be equal to that under 15. Thus, two persons of working age will have to support one retiree. On the other hand, they will be a reduction in supporting children.

Older persons invest very conservatively, and therefore the economy might lack the dynamic financial markets required to fuel growth and entrepreneurship.

To a large extent, the same analysis applies to South Korea. North Korea is faring slightly better with a total fertility rate of nearly 2.

Russia has a population of 142 million for a country representing 19% of immerged land. There has been a small rebound in birth rates, but it may not be sustainable. The percentage of the population over 60 is low compared to China, Japan and South Korea, and is of only 20%. The imbalance between women and men – 1 160 women for 1 000 men – and the fact that women in rural areas are unable to find husbands who are not addicted to alcohol, contribute to a low level of marriages, and consequently low fertility. With life expectancy expected to rise in the coming years, while fertility is expected to remain at its present level, the old-age dependency ratio is expected to double by 2050. This would mean that spending on allowances and pensions would rise from the present figure of 9% to 12% by 2030 and 16% by 2050.

The situation in the US, while not as bad, is worrying. Its population of 316 million is growing at the rate of 0.7% and is expected to reach 400 million by 2050. 22% of the population will be over 65. The life expectancy is slightly higher than 78 years but the total fertility rate at 1.9% is below replacement. The reduction in birth rate applies also to immigrants, usually an important component in US demographics.

India’s demographics are quite different. Its population is only slightly below that of China, at nearly 1.3 billion, and it has the world’s largest number of young people since two thirds of its population is under 35, and the average age of the population is 27. But in India too the population is aging and is expected to reach 37 by 2050. At that time 300 million people with be over 60. The total fertility rate is 2.5. It should therefore still enjoy a demographic dividend compared to the ageing societies we have reviewed.

The Diasporas

There is a large Tibetan diaspora in India where the Dalai Lama has established his headquarters and this has been an irritant to the Chinese government while achieving little for the Tibetans. The Dalai Lama relinquished his political responsibilities in March 2014 and has been replaced by a Harvard scholar who has never visited Tibet

The presence of a Chinese diaspora in Russia is a more complex issue as there is an important labor movement, of legal and illegal immigrants, along the border and is becoming an important issue in the relations between the two countries. Migrant labor is essentially employed in agriculture and construction. The total number of Chinese in Russia is estimated to be 400 000 including nearly 20 000 Chinese students in Russian universities. The vast majority of the migrants come to make money and have no plans to settle permanently.

The Chinese diaspora in the United States is much larger with 1.6 million immigrants and just as many US citizens of Chinese origin, heavily concentrated in the states of California and New York. Several incidents have questioned the loyalty of some of the immigrants to the host country.

There is a small but concentrated Korean diaspora in China numbering approximately 600000.

There has been a considerable flow of highly qualified and entrepreneurial migrants from India to the US and the Indian diaspora amounts to 2.5 million people and this number is expected to double in the next ten years. Indians are thus the most important group of Asian immigrants in the US. The 75 000 Indian students in the US are the largest foreign group registered in colleges and universities. Indian immigrants have been, on the whole, an extremely educated and successful group with total assets estimated to total $76 billion.

There are in the US over 3 million Americans of Russian descent.

Water

There is a contentious issue between China and India regarding the latter’s water diversion plan which will shift 50 billion cubic meters of water from the Yarlung-Tsangpo, an affluent of the Brahmaputra originating on the Tibetan plateau, to the Yellow River so as to harness hydroelectric energy. This would severely restrict the flow of water to India.

Energy

As mentioned in the first part of this article, China and India, but also China and Japan, are competing to secure energy sources.

While the competition between China and India lies in securing energy sources in other countries, that with Japan is not only centred around Russian supplies, but also on the presumed hydrocarbon deposits around two rocky uninhabited islands in the East China Sea that the Japanese government purchased from a private owner and which China claims as its own.

China is uncomfortable with the long shipping route oil takes from the Middle East to its ports. The area is populated by pirates and other revolutionary or semi-revolutionary movements that could be allowed, if not encouraged, to target Chinese vessels. Ensuring the safety of the shipping routes is the official reason for China’s investments in naval power.

Central Asia

Russia fears the political influence that China may exert on the Central Asian republics, in particular through the SCO – the Shanghai Cooperation Organization – set up by China but pf which Russia is also a member. India is, incidentally, an observer, and Russia would like to invite the country to full membership status. Intriguingly, however, while Russia sees to remain the determining factor in influencing policy in Central Asia, China’s position is that these states are free to develop relations with countries not members of the SCO and that the organization is not, and should not, become an anti-Western club.

Russia opposes China’s wish of extending the SCO agreement to cover trade in the form of a free trade agreement, as Russian corporations would be unable to compete on price. It would also open the area to Chinese investments, including in energy projects. China is successful in the region due to the aid it brings, diplomatic pressure and large investments. Russia’s policy has been to prevent Central Asian countries to supply European markets by bypassing the Russian pipeline system and ensuring it has a monopsony. However, in view of the decreased quantities purchased by Russia affected by the reduced demand in Europe, these countries have looked for alternative markets, and China is the obvious one.

Russia would like to see a coordination of pricing policy on energy exports between the member countries that are energy exporters.

Another Chinese advantage is that it is perceived by Central Asian governments as a trading partner and a door to Europe and the Middle East, and not as a competitor as Russia is for gas supplies to Europe. Russia’s role as a supplier of finished goods disappeared with the downfall of communism.

China sees the pipelines for hydrocarbons from Central Asia as a hedge against possible disruptions of shipping lanes from the Middle East. However, just as it is beefing up its Navy to protect those lanes, and to rely less on US maritime power, it will have to beef up its security along the pipelines to protect them from possible attacks.

Russia sees China as a good partner in its policy of containing the US in Central Asia and elsewhere. In fact one can say that Russia sees China as a partner only when its relations with the West are less than perfect – which is the situation at present.

China has been able, so far, to restrain any influence the US could have on Central Asia thus enabling China to secure energy resources for itself and to prevent the infiltration of democratic ideas.

The US has key interests in the region: to support its military adventure in Afghanistan, to have access to energy – without relying on the Russian logistical infrastructure – and to wield political influence in the entire Central Asian area. The US also sees an opportunity to lessen Russia’s position as a gas supplier – should the Central Asian republics find alternative routes for their gas shipments, Gazprom will no longer be in a position to export as domestic demand is rising from an already important base.

Weapons

China’s strategy has been, and will continue to be in the foreseeable future, to encircle India both through its own forces and through those of its allies who neighbour India, Pakistan in in particular. China, nevertheless, contrary to the US, is not part of any defence organization and thus does not have the burden of having to defend the territories of other nations.

China’s military budget for 2015 has been increased by 10%, reaching $145 billion, a rather steep figure in regard to the slowing of the country’s economy. China has installed missile systems pointing to India’s major cities while China’s industrial heartland is very far removed from their common border.

China’s nuclear strategy is to use their missiles only for a second strike and not to use them for a first strike on any state. It may, however, rapidly change this policy if it so decided.

India is also worried with the building of a port, by China, on the coast of Myanmar, that would give China direct access to the Bay of Bengal. It is also worried by the increasing presence of Chinese submarines in the Indian Ocean. The submarines use Colombo as a refuelling port, leading India to fear that China was building alliances with countries surrounding India – the so-called ‘string of pearls.’ China has called this project the 21st Century Maritime Silk Road, a project financed by China to the tune of $40 billion.

Indian military hardware purchases, the world’s largest with a budget of $250 billion over 10 years, are an important source of cash for the ailing Russian military manufacturers.

The two countries will be jointly developing a fighter plane of the fifth generation. India has also served Russia as a basis to enter the South East Asian markets for military hardware by servicing and training users of Russian equipment sold to those countries.

Russia has been very supportive of India in its conflict with Pakistan over Kashmir, among other things committing not to supply weapons to Pakistan, an embargo it lifted in 2014.

The US has also been a major provider of mostly defensive weapons to the Indian army and this may lead to a licensing agreement for India to manufacture American weapons.

India and Japan have reached an agreement regarding military cooperation. Japan is about to review its constitution to enable it to expand its military which is already considered as one of the world’s best and China would have problems measuring themselves to Japanese firing power in case of a conflict. It is also backed up by the US military that have bases in Japan.

The main discussions between the two countries centred on the supply of nuclear technology and fuel to India by the US. This is an important step considering the fear of nuclear proliferation pervasive in the world today and particularly considering the fact that India will be adding to an already existing nuclear capability while it has never signed the Nuclear Non Proliferation Treaty (NPT). This allows the US to put pressure on New Delhi to reduce its energy purchases from Tehran. Further, India’s rivalry with Pakistan might lead the latter to accelerate its own weapons programs should India proceed with its own purchases.

For India this is an important development as its supplies of uranium are drying out. The treaty also allows it to remain a nuclear player without signing the NPT, although the country has entered negotiations with the International Atomic Energy Agency to negotiate an agreement that would have clauses specific to its situation.

The US has insisted on certain clauses in the treaty such as India accepting not to undertake further nuclear testing, not reprocessing the spent fuel and accepting that the President of the United States certifies, annually, that the country is respecting these clauses.

For the US this is a major step in containing China and relations between China and India took a turn for the worse, with China supplying nuclear power plants to Pakistan, after this agreement was signed.

Another main motivation of the US has been to prevent India making up for its energy shortcomings by purchasing Iranian gas that would be routed through an Indian-Pakistani pipeline. Financial motives are not left too hard behind, considering the deal would generate close to $100 billion in sales for US corporations to which must be added large sales of defence equipment which presently India purchases from France and Russia.

India is also the country with which the US has conducted the largest number of military exercises in recent years.

Following President Obama’s visit to India in 2015, a Joint Strategic Vision for the region was agreed upon. Its objective is to support sustainable development and address poverty. However, the main objective is to ensure India’s Navy plays a dominant role in the Indian Ocean.

Japan is now allowing its military to have an activity outside the country’s territory.

China’s increased militarization worries Japan, particularly the installation of missile launching ramps, China’s declaration of an exclusive maritime and air space, and the highly vocal Chinese media constantly threatening of war with Japan.

China, in turn, fears a reunified Korea with nuclear weapons.

Russia continues to be China’s main weapons supplier as it wants the money from these exports which are of the order of $2 billion per year. Since 2006, the two countries have conducted joint manoeuvres, and intensified their military cooperation.

China, however, no longer represents an overwhelming share of Russia’s weapons exports – a mere 20% today from a high of 70% ten years ago, while the value of total exports has risen considerably, thus decreasing even more the importance of Chinese purchases. Further, with the new cold war, Russia itself is becoming its own major customer.

Russia is eager to maintain this monopoly on Chinese weapons purchases, and the EU and US embargo assist them in achieving this objective. However, inevitably, China will want to be involved in weapons development and testing rather than simply acquiring technology entirely developed in Russia. It has already indicated it does not want to buy finished weapons or assembly kits but want to build the planes in China.

On a longer term basis, it is obvious that China will develop its own military platforms and it is already successfully copying several weapons systems thus severely reducing its imports from Russia. This worries Russia as on a conventional army basis, China would have the upper hand in case of conflict, and Russia would have to rely on tactical nuclear weapons where it has the upper hand. While the INF treaty constrains Russia’s capability of deploying intermediate range nuclear missiles, Russia would probably opt out of the treaty should it feel threatened by China.

North Korea is actively developing its nuclear program and at least one estimate is that it may possess 100 nuclear heads by 2020.

On the other side of the demilitarized zone, there are US forces on the ground. The US keeps 40 000 troops in South Korea.

Border issues

China and India have fought several border wars and in November 2006 China declared one of the Indian provinces, Arunachal Pradesh, to be part of China, calling it South Tibet. India also claims China is occupying illegally an Indian province in the Himalaya.

In fact, China and India are in a constant military confrontation along their mountainous border.

China is also in a confrontation with several countries regarding their maritime borders, and particularly Japan.

The Diaoyu / Senkaku (Chinese and Japanese names, respectively) islands have been a bone of contention for 120 years but China has lately become assertive on their claims particularly as it is believed that the waters surrounding them are rich in hydrocarbons and fishing grounds.

China’s attitude is also fed by the fact that it is using Japan as a useful scapegoat that helps it maintain strong nationalist feelings of its population, an important cement in a country in which social pressures between different groups, such as rural and urban, are increasing and threatening the country’s stability. China also believes that Japan is on a long-term decline and will not be able to adequately respond to China’ bullying presence.

China’s claim that the entire South China Sea belongs to it has opened the door for the US to pose as the protector of the South East Asian countries.

The South China Sea is an important point of convergence between the interests of the two countries as well as the countries of Southeast Asia. The rise of Chinese naval power – which could become larger than that of the US in the next 5 years – could threaten the US’ dominance in the area.

The South China Sea sees the flow of half of the world’s trade and the conflictual situation could disturb the globalization process which explains why China is becoming interested in continental routes and goods are shipped by train through a new train link which is the worlds longest and reaches all the way to Madrid.

The interest in the area, however, does not stop there. China believes that it contains massive quantities of oil – approximately the same as those in the Arab Gulf.

China’s development and purchase of high-powered microwave weapons, 1500 missiles, submarines and amphibious ships seem targeted at resisting, or keeping at bay, the US Navy in case of a conflict with Taiwan. As a response, the US moved 20 vessels from the Atlantic to the Pacific fleet in 2007 and more such moves are forecasted. The South China Sea is considered by the US as a natural border China should not cross. It is a strategic passage point between the Indian Ocean and Japan and Korea.

China also has a border issue with Russia. The two countries share a 4300 km border and an important historical confrontational past.

Inside those two borders the major issues about the autonomy of certain regions and peoples – Taiwan, Tibet and Xinjiang for China and a considerably large number of areas in Russia and the adjoining countries in Central Asia that were once part of the Soviet Union. If China has a clear position on this issue – i.e. a total aversion to any such move including with the use of force and population movements – Russia has a more opportunistic stance. It has fought an internal war to prevent the Chechen aspirations to an independent state but intervened military outside its borders in Georgia and is the only country to recognize Abkhazia and South Ossetia as independent states.

Russia fears that its under-populated and vast expanse of territory rich in natural resources, Siberia and the Far East, yields in the face of China’s demography while Russia is in a state of demographic collapse. These two areas have large deposits of hydrocarbons, diamonds, gold and other metals as well as large tracts of forests that provide raw materials to the Chinese paper industry.

Some of the lands forming the region of the Russian Pacific were Chinese until the eighteenth century, and while China has not made any recent claims for their return, Russians fear they may do so.

Russia and China are intent in developing their relations but simultaneously competing for domination of Central Asia and attracting Japanese and South Korean capital to develop the Far East so as not to be exclusively bound to China.

Simultaneously, Russia will redevelop China’s and North Korea’s moribund industry in the adjoining North Eastern parts of the country so as to economically integrate these areas.

Russia also has a contentious issue with Japan that has prevented the signing of a peace agreement between the two countries since the end of the Second World War. It concerns what the Russians call the Southern Kuril Islands, and the Japanese the Northern Territories.

Russia carried out military drills on the islands and announced it would spend over $1 billion between 2016 and 2025 to develop these islands. Japan would like to invest in these islands, particularly in energy projects.

While for many years neither country appeared to think, in spite of speeches to the contrary, that dealing with the other was a priority, Primer Minister Abe’s visit to Moscow in August 2013 seems to have started a different process. One thing Japan needs to avoid at all costs is a coalition between China and Russia.

A dialogue process was started between the defence and foreign ministers of the two countries to discuss measures to combat piracy and terrorism.

Russia’s strengthening of its military presence in the Arctic should also be considered as part of its Asian play, the Arctic being a possible base for ventures in Europe, the American continent and Asia.

Japan also has a territorial issue with South Korea centred around the Takeshima or Tokdo islands, as called respectively by the Japanese and Koreans, that each country claims to be a part of their territory.

These are very small volcanic islands. They are, however, of interest economically as their waters are good fishing grounds and the surrounding waters are believed to contain gas, although none has so far been found. Further, if an international arbiter would rule in favour of Korea, Japan’s case for the Kurile Islands and the Senkaku Islands would be severely affected as the country’s claims in all three cases stems from the San Francisco Peace Treaty that remained vague on this issue.

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East Asia

Chinese pneumonia outbreak (2019-nCoV): An emerging threat to global public health?

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“People’s live and health should be given top priority and the spread of the outbreak should be resolutely curbed”. President Xi Jinping

After decade of neglect, infectious diseases (IDs) have re-emerged as a field of inquiry in the area of global public health and health security. Gradually, the world has come to realize the threat of emerging IDs. Human history is abundant with stories of epidemic infections. Epidemiologically, IDs tend to follow a cyclical pattern, since they often produce immunity in survivors, and microbes await a new generation of hosts to infect. On the other hand, the disease-causing viruses or microorganisms migrate to geographically distant and immunologically vulnerable inhabitants, producing a pandemic, or regional and global outbreak. The historical relationship between the humanity and IDs is fascinating and noteworthy. IDs plagued civilizations long before the development of territorial states during the European Renaissance. Subsequently, epidemic diseases shaped human history, generally, and military conflict, in particular. During the Peloponnesian Wars, disease demoralized the Athenian people, weakened the army, and undermined the political leadership. Subsequently, more than 2,500 years later, the 1918 influenza epidemic killed 25 million people, including 500,000 Americans. The Spanish flu struck 294,000 allied troops in the fall of 1918.Moreover, the 1918 flu pandemic killed 50-100 million, which is more than the combined total casualties of World War I and II.

Until the early twentieth century, plague, smallpox, influenza, and other scourges decimated human populations around the world. Despite exceptional improvement in pandemic control, IDs remain a major threat to global public health. In 1998, 13.3 of the 53.9 million deaths worldwide, or 25 percent of all death, resulted from IDs. Historically, some major disease outbreaks in China, including the 1957 Asian flu, the 1968 Hong Kong flu, and the 2002/03 SARS (Severe Acute Respiratory Syndrome) epidemic, have triggered epidemics elsewhere in the world, killed approximately800 people around the world. In total, SARS infected more than 8,000 people in 26 countries. As demonstrated in the SARS epidemic, the new strain of coronavirus (2019-nCoV), which causes a type of pneumonia that has not previously been identified in humans, resulting spillover of disease outbreaks in China and neighboring countries.

The 2019/20 novel coronavirus outbreak, also known as the Chinese pneumonia outbreak or the Wuhan corona virus, is a viral outbreak that was initially identified during mid-December 2019. Chinese authorities identified the new corona virus has resulted approximately500 confirmed cases in 13 provincial-level regions in country, and additional cases being identified in a growing number of countries internationally. On January 21, 2020, the first case in the United States was also announced. Confirmed cases have also been reported in Macau, Hong Kong, Japan, Thailand, South Korea and Nepal. As of January 22, 2020, nine deaths have occurred all in China. Thus, 2019-nCoV may have serious implications on stability, prosperity, and health security at the global level. Factually, we have now entered in a new era characterized by the dreadful consequences of decade of negligence of IDs at the global level. There is a great desire to know what the future of IDs will bring, and also to know how we should behave in the future to minimize the IDs outbreaks and casualties. Now is the high time to realize that we are in darkness than to pretend that we can see the light.

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East Asia

Tsai’s re-election Poses New Challenge to China

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Taiwan is never out of news. Taiwan-China ties is now a part of popular folklore with Beijing expressing its resolve a number of times to integrate the island nation with the mainland by all means and if necessary by the use of force and Taiwan defying the might of China’s growing military muscle. The political pendulum in Taiwan has swung between parties which are fiercely independent and those which take a softer stance towards Beijing. The latest in this narrative is the resounding landslide victory by the incumbent President Tsai Ing-wen of the Democratic Progressive Party (DPP) when elections were held on January 11. The landslide victory that the voters delivered is also a stunning rebuke of Beijing’s campaign to isolate the self-ruled island, handing over its first female leader a second term. It was only in November 2019 that Tsai’s DPP suffered a huge defeat in Taiwan’s local elections but the political pendulum swung quickly in her favour, with the political resurgence ensuring her victory and another term at the helm to carve out a course for Taiwan’ future.

Tsai’s victory would surely infuriate China. Soon after her victory, Tsai told the cheering crowd: “Today we have defended our democracy and freedom, tomorrow let us stand united to overcome all challenges and difficulties”. Tsai secured 57 percent of the popular vote with a record-breaking 8.2 million ballots, 1.3 million more than her 2016 victory. Her main rival Han Kuo-yu, from the China-friendly Kuomintang, racked up 39 per cent and conceded defeat. The DPP managed to retain its majority in the island’s unicameral parliament with 61 out of 113 seats, while the KMT took 38 seats. The result is a blow for Beijing, which views Taiwan as part of China and has made no secret of wanting to see Tsai turfed out.

Over the last four years, Beijing had ramped up economic, military and diplomatic pressure on the self-ruled island, hoping it would scare voters into supporting Tsai’s opposition. But the strong arm tactics backfired and voters flocked to Tsai’s DPP, fuelled in part by China’s hard-line response to months of huge and violent pro-democracy protests in Hong Kong. The US, the main backer of Taiwan and bound by the Taiwan Relations Act and therefore main military ally, rejoiced Tsai’s re-election as it felt that it would contribute to maintaining cross-Strait stability.

What is that came in Tsai’s favour that led to her victory? She pitched herself as a defender of liberal democratic values against the increasingly authoritarian shadow cast by China under President Xi Jinping. As said, Beijing has vowed to one day retake the island, by force if necessary and loathed Tsai because she refuses to acknowledge the idea that Taiwan is part of “one China”. Though Tsai is committed to dialogue with Beijing and wants peace, she is not shy to urge Beijing to halt its sabre-rattling towards Taiwan. She expects that Beijing respects the idea that only the island’s 23 million inhabitants can decide its future.

There is yet another angle to Taiwan-China relationship. As with many other Asian countries, China has successfully increased Taiwan’s dependence on it economically making the latter as its largest trading partner, thereby increasing Taiwan’s vulnerability. Beijing lost no time in reacting that it continues to stand by its policy of opposing any form of Taiwanese independence and its spillitist attempts and that it  “uphold(s) the basic principles of ‘peaceful reunification’ and ‘one country, two systems’ and the one-China principle.”

Taiwan’s election results showed that Beijing’s carrot and stick policy utterly failed. This was the second major electoral setback for Beijing in recent weeks. In November, Hong Kong’s pro-democracy camp scored a landslide win over pro-Beijing parties in district elections as the city convulses with months of anti-government protests. Tsai’s landslide victory was indeed a slap in the face to Beijing as Taiwanese voters rejected to its intimidation. In the coming months it is to be seen if Beijing’s hardline position towards Tsai shall continue or if Beijing adopts a more ‘soft sell’ approach that is more carrot and less stick from now on. That is unlikely to happen, though.

For record, Beijing hoped that it could replicate the Hong Kong model of “one country, two systems” in Taiwan with the hope that it can apply the same model on Taiwan if the island ever came to be controlled by Beijing. But as the election outcome demonstrated Taiwanese voters are wary of such a proposal.

What is indeed Tsai’s doctrine? As can be discerned from her address on May 20, 2016 after her victory for the first time as President, her international policy vision clearly intended to drive the country away from its reliance on China and toward the rest of the world. In her speech, Tsai articulated Taiwan’s New Southbound Policy, which implied that Taiwan shall engage with South and Southeast Asian states and share its expertise and democratic values with an international community.

Beijing has successfully worked for Taiwan’s isolation by economic doles to countries that maintained diplomatic ties with Taiwan, leaving only 15 countries now with diplomatic ties from the 22 nations that had diplomatic relations with Taipei when Tsai became President in 2016. Between 2016 and now Beijing successfully campaigned to poach Taipei’s allies and pressured international organizations and corporations to exclude Taiwan, from the World Health Assembly to Marriott and American Airlines. Owing to China’s pressure, the United Nations, which does not recognize Taiwan, has stopped allowing Republic of China passport holders into its New York headquarters.

The DPP does not recognize the so-called “1992 consensus” considered by Beijing to be indispensable for cross-strait exchanges. While Beijing interprets the consensus as the self-governing island and the mainland as part of a single Chinese nation, Tsai refuses to acknowledge it as the “consensus” limits Taiwan’s international space and severs the official cross-strait communications that had thrived under her predecessor, Ma Ying-jeou. Tsai has successfully rebuffed the Chinese pressure and bolstered Taiwan’s international presence. Her New Southbound Policy received a boost from the US-China trade war. She realised that by befriending the US, she can garner global support so that she can keep a hostile Beijing at bay and preserve Taiwan’s sovereignty. Thus, Tsai hoped that Taiwan can present itself as a more humane, democratic alternative at the international stage.

From its part, Taiwan has worked hard to retain its remaining diplomatic allies despite Beijing’s attempts to woo them away from Taiwan to China. For example, in May 2018, Taiwan agreed to assist Haiti in securing a $150 million infrastructure loan from Taiwanese banks. Also in May 2019, Taiwan agreed to extend a $100 million loan to Nicaragua and its embattled President Daniel Ortega. Though both Haiti and Nicaragua are serial rights violators, both states are among Taipei’s 15 remaining formal allies. Though the deal is still active, Nicaragua has not yet received its loan as Taiwan has not found a domestic bank to transfer the funds due to fears of US sanctions.   

Though Tsai has spoken of creating an ‘Alliance of Democratic Values’ to stand in opposition to an increasingly overbearing China, some of her diplomatic moves are questionable. This is because Tsai has “rewarded” rights violators like Nicaragua, Haiti, and eSwatini, an absolute monarchy and one of the world’s least free states. King Mswati III rules all branches of national government, and critics of the king are subject to imprisonment. In 2018, the king received an honorary degree from a Taipei university, where Tsai thanked eSwatini “for speaking up for Taiwan and always being by our side.” Such conduct on the part of Tsai can have few supporters. While continuing her fight to keep Taiwan’s remaining allies, Tsai might toy with the idea of replacing Republic of China (ROC) with a “Republic of Taiwan” in preparation to a future declaration of Taiwan independence. Beijing has warned that any such move could trigger a use of force against Taiwan. 

Instead, it could be more desirable if Tsai continues to pursue her New Southbound Policy, seen as deepening Taiwan’s ties with other Asian states and as a way to build more sustainable ties so that Taiwan could survive as a peaceful nation without worrying much about pressure from China. The New Southbound Policy has won praise for assisting Taiwanese businesses in China in returning to Taiwan. These companies have benefited from government incentives and for relocating to Southeast Asian states. Coming in the wake of the ongoing US-China trade dispute, the initiative announced in 2016 has motivated Taiwanese companies to leave China and avoid high export tariffs. With her re-election, Tsai is expected to continue with her engagement with neighbouring countries and drive Taiwan’s foreign policy and trade away from the cross-strait paradigm. What probably is lacking or weak is to inject the new dimension of ethics-based foreign policy in Tsai’s narrative. 

A lot was at stake for Tsai when she sought a second term. And, now with her win, the global impact of the result is going to be huge. Taiwan has played a key role in the global supply chain as a high-tech manufacturer, mostly notably as an Apple Inc supplier. Its strategic location just off the coast of China and on the edge of the Pacific is equally important. Taiwan is also a potential military flashpoint between the US and China as the former sells arms and provides other assistance to Taiwan. The island nation also lies on major shipping lanes between Southeast Asia and US allies Japan and South Korea, and on the disputed South China Sea, where China has built artificial islands and air bases. Taiwan is also close to a major US military base on the southern Japanese island of Okinawa.

Leading democratic nations honour Taiwan’s democratic credentials despite not maintaining official diplomatic ties. It is therefore for this reason when Tsai says it is up to Taiwan, not China, to decide the island’s future, and warns of the Chinese threat to democracy and liberty, the world listens. It was also a reason why her main opponent Han Kuo-yu of the Kuomintang party, which ruled China until 1949 when forced to flee to Taiwan after losing a civil war, lost as he favoured close ties with China and believed that it was the only way to ensure Taiwan’s security and prosperity. His double-speak was that he also claimed to defend the island’s freedom and democracy.

Though China was closely watching the elections and expected a Han victory, the people of Taiwan thought otherwise in reposing faith with Tsai. What China is likely to do now is that it would further ratchet pressure on Taiwan, perhaps even by conducting military drills close to the island to intimidate. China needs to be mindful that a conflict would hugely damage both China and Taiwan that it can ill afford. The real test/danger would come if Tsai declares formal independence and term Republic of Taiwan and if so, if Beijing would use force to reclaim the island as mandated by its 2005 law authorising the use of force against Taiwan if China judges it to have seceded.  

Positions of the US and China

As expected, the US rejoiced in Tsai’s victory, hailing it as a demonstration of the island’s “robust democratic system”. Although the US has no formal diplomatic ties with Taiwan, it is bound by law to provide the island with means to defend itself. The US State Department issued a statement, saying that “under her leadership, we hope Taiwan will continue to serve as a shining example for countries that strive for democracy, prosperity, and a better path for their people”.

The US saw the election results as a blow to China. Though it did not take any open position, it expressed concern at Chinese efforts at intimidation and influence. When Beijing successfully wooed some of Taiwan’s diplomatic allies in Central America and the Pacific, the Trump administration was dismayed, which is why it approved billions in new arms sales to Taiwan so that it can defend its sovereignty when needed. The US is concerned that Beijing has been trying assiduously to wean away Taiwan’s remaining allies, trying to see that they stick with Taipei and not give Beijing further foothold.

Even when the US-China trade stand-off continues and elections in Taiwan over, the US transited one of its warships through the Taiwan Strait, a move that irked Beijing. The passage of the USS Shiloh guided-missile cruiser through the narrow waterway, separating the island from the Chinese mainland, was announced by the Taiwanese Ministry of National Defense and confirmed by the US Seventh Fleet as a “routine visit”, demonstrating the US commitment to a free and open Indo-Pacific.

Interestingly, the development came a day after President Trump and his Chinese counterpart Xi Jinping sealed a “phase one” trade deal as part of a broader bid to reduce trade tensions that have stirred up global markets for more than a year. The deal, however, is unlikely to resolve persisting and much wider strategic tensions between the US and an increasingly powerful China.

Though Beijing did not react on the passage of the US warship through the Taiwan Strait, it said that it does not oppose “normal passage” of foreign vessels through the strait, though it censures trips aimed at sending a geopolitical signal. Beijing is paranoid that Tsai is getting cosy with Washington, accusing the latter as the main reason for sowing rising discord between the mainland and Taiwan. Beijing is further dismayed that diplomats from Britain and Japan congratulated Tai on her re-election.

Writing in Japan Forward, Robert Eldridge says that like the US, Japan should have its own Taiwan Relations Act. The administration of Abe Shinzo is openly cozy with the Tsai administration. He and his brother Nobuo Kishi are known to be highly pro-Taiwan. There have been a variety of formal and informal interactions between the two countries. In March 2017, Senior Vice Minister of Internal Affairs and Communications Jiro Akama travelled to Taipei for one day to promote tourism. He was the most senior Japanese official to visit Taiwan in 45 years. In response to criticism from China, Abe later responded that Taiwan is “an important partner that shares Japan’s values and interests.” In addition, Keisuke Suzuki, the director of the ruling Liberal Democratic Party’s youth division and a member of Deputy Prime Minister and Finance Minister Taro Aso’s faction, visited Taiwan. He again visited Taiwan to attend a Taiwan-US-Japan security-related conference at which he argued for a Japanese version of the Taiwan Relations Act (TRA).

Japan, which chose diplomatic relations with the People’s Republic of China over Taiwan, has no such TRA governing its relations with Taiwan, despite the historic, geographic, and socially close ties it has with Taiwan. However, while the US passed the TRA in a matter of weeks, Japan has been unable to do it over the course of decades.

Reactions in Hong Kong

Expectedly, Hong Kong protestors feted landslide election win for Tsai. They saw this as a fillip to their movement that puts pressure on China. The former British colony returned to Chinese rule in 1997 amid promises it would be granted a high degree of autonomy and eventual universal suffrage. But China’s tightening grip on the city and Beijing’s failure to live up to its promises have fed the unrest. This is one of the biggest popular challenges to the ruling Communist Party since the return.

There is a growing opinion within the DPP that Taiwan owes Hong Kong more concrete support. The election outcome demonstrates that it is a proof that Xi Jinping’s strategy of keeping Hong Kong and Taiwan under control is a total failure. The 23 million people of Taiwan are not willing to give up their sovereignty and subject to the authoritarian control of the Chinese leadership.   

Taiwan was part of Japan for 50 years before being handed back to the 1911 regime, and has never been ruled by the Chinese Communist Party, nor has it formed part of the People’s Republic of China. Tsai argues that the erosion of democratic progress and civil liberties in Hong Kong under China’s “one country, two systems” means that Taiwan should never take Beijing seriously when it talks about “unification.” Taipei expects Beijing should respect the popular will of the Taiwanese people as reflected in the election outcome. Viewed from all perspectives, Tsai’s re-election could prove to be a fundamental turning point for Taiwan. This does not mean to suggest that Beijing would soften its stance any time soon as Beijing made it clear that its position would not change even if Tsai is re-elected. China is committed to promoting “one country, two systems” for Taiwan, a model under which Beijing runs Hong Kong with a high degree of autonomy. Tsai has openly rejected such a system. Given the divergence of positions by both sides, the future is full of complexities with no ready answer in sight. 

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Neo Illustration of 2020 World: Distinct Dimensions

Ramla Khan

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The global set of circumstances in the erstwhile months are revealing a neo illustration of the world for the year 2020. The vying which remained restricted and controlled in the South Asia and Middle East for the preceding years have tossed and turned. The tussle which requires to be untied is that who is the restive yearning to wide wake the likeliness of a wartime and what are its real haves in the view?

Dimension Four

China’s upsurge as an economic giant has been nipping the US statecraft since the extensive years. The eighteen months old ‘Trade war’, a locution floating among US -China fiscal ties is an explicit evidence to it. The pronounced term trade war although not seems a strap butchery breed of war but is casting its hefty footprints all over the Asia and Middle East. With China Pakistan Economic Project-CPEC entering its Phase-II with the dawn of year-2020 the concerns of West and New Delhi seems to multiply. Pakistan’s Minister for Planning and Development Asad Umar mentioned that the project Phase-I was based upon the perusal of routes for the transit and transport of goods and speculation of the infrastructure gaps. Here now when the scrutiny has been concluded, the Year-2020comes up with new goals and challenges Pakistan and China. The take aim is to develop the Railways Main Line (ML-1), a $9 billion project, expected to give a swift boost to the steady progress. The prime focus in Phase-II is the establishment of the three Special Economic Zones (SEZs). Rashakai in Nowshera, Allama Iqbal in Faisalabad and Dhabeji in Thatta to enforce greater connectivity. The initiative to SEZs development was taken long ago during the 6th and 7th Joint Coordination Meeting in 2016 and 2017 respectively. It was estimated that the zone scheme would be complete up to year-2030. All eyes are hopefully fixed upon Chinese headway with Washington performing its part to counter its economic rise. The question is will Beijing be able to give its China’s dream a real image by the end of this decade? What are the agents that can play an obstacle? Thus the year 2020 and onwards are the finale crucial pivotal years to prove the feasibility in the  Chinese Dream.

Dimension Three

The earlier flutter back created through the American president Donald Trump’s Kashmir mediation bombshell either fabricated or unfabricated brought Islamabad and New Delhi at the verge of another nuclear conflict. The antagonism in the matter had not diffused yet another stage was devised by the Pentagon’s recent play in Baghdad. The killing of the Iranian General Qasem Soleimani, the most powerful figure in Tehran next to ‘the Supreme Leader Ali Khomeini’ is inevitably a massive blow to the Iranian and Iraqi sovereignty by Washington. The probing query of the moment is why United States is performing all this pursuit? Is it a weird dimension of  the US-China Trade War? Is this US manufactured deterioration of the Asia and Middle East a succor to drub the China Pakistan Economic Corridor CPEC circuit. Beijing feat in Pak-China project and Trade war, largely depends upon the stability and sustenance of the South Asia ruined by the prior US disinformation politics and now the hound attacks in the Middle East is a continual effort to fracture CPEC routes and its prime members. The sequence of Iraq incident was right away followed by the Prime Minister Imran Khan inauguration of the mega project of the Special Economic Zone of Faisalabad Industrial Estate Development and Management Company (FIEDMC) under the China-Pakistan Economic Corridor.

Dimension Two

Are we to blame the American population who voted the Republican Party for Donald Trump’s stay in the White House for the distorted delineation towards which almost the partial natives of the or bare leading or the great power’s proclivity to exploit weak states every now and then for its national gains? Is the United States aiming to exhibit a third world war?

Dimension One

The fact not to neglect is of the spark of First World War with the brutal assassination of Arch Duke Ferdinand not in his own country but in Bosnia. The incident is a thought provoker for the analysts of day to figure why this tally replica episode did not signal another world war three yet. Is the contour of diplomacy and liberalism working well or has the criterion of war fluxed an evolution? Will the future wars be followed by trade conflicts? As of now the world is likely to face the unwelcomed chaos of US-Sino Trade War in substantial magnitude.

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