Friday, 27 February 2009


Jing-dong Yuan

Asia Times, February 27, 2009

MONTEREY, California - United States Secretary of State Hillary Clinton visited Asia last week as America's top diplomat, the first time in 50 years that a US secretary of state chose Asia, instead of Europe or the Middle East, as their first trip abroad.

Asia is rising, and so is its place on the US foreign policy agenda. Clinton's visit came at a critical juncture as the Barack Obama administration charts a new course for America's foreign policy even as it addresses the domestic economic challenges.

Clinton's visit to a large measure reflected the Obama administration's priorities and its new approach to international relations. America will continue to strengthen its ties with allies but will be more willing to listen. It will engage the Muslim world and restore its image to win more friends and hence receive greater support for its anti-terrorism efforts.

And the George W Bush administration's pragmatic management of China's rise will continue - engaging Beijing where it can on a broad range of issues where the two countries share common interests - and be candid where Washington has particular concerns.

The US-Japan alliance remains the "cornerstone of security in East Asia" and Clinton, in choosing Japan as her first stop on the Asia tour, reassured Tokyo that Washington continues to value and emphasize the bilateral relationship in a changing Asia. An indication of this gesture was the invitation to Japanese Prime Minister Taro Aso to visit the United States.

(...) [artículo aquí]

Thursday, 26 February 2009


Arvind Panagariya

The Economic Times, February 26, 2009

Only a few months ago, many in the media had been arguing that the emerging market economies (EMEs) had now acquired a growth momentum of their own and were immune to the booms and busts in the developed countries. Less than six months into the financial crisis that originated in the United States, the “decoupling” thesis is biting the dust.

The crisis, which turned the ongoing economic slowdown in the United States into a full-blown recession, has been transmitted to the Asian EMEs at lightening speed. Triggered as recently as September 2008, it has led to a spectacular spiralling down of the GDP in many Asian countries.

And more integrated the country’s economy into the US economy, the more severe the impact. In South Korea, the GDP has fallen a whopping 21% in the last quarter of 2008. The loss in Singapore has been 17%. Taiwan has seen its industrial output decline by a gigantic 32% in 2008.

Even China, which is less dependent on the United States than these three countries, has seen its growth rate collapse to a negligible annualised rate of 2% in the last quarter of 2008. No longer can it be claimed that China stands apart from the rest of the human race in its ability to push ahead with growth under all circumstances.

Precisely how badly has India been impacted is not yet clear, however. The Central Statistical Organisation (CSO) will release the GDP data for the last quarter of 2008 only on February 27, 2009. The news on the export front is discouraging, however.

Since the beginning of the financial crisis, merchandise exports during each of the four months have declined relative to the corresponding month in the preceding year: 12.1% in October, 9.9% in November, 1.1% in December and 22% in January. But given India remains far less dependent on merchandise exports than its East-Asian counterparts, despite considerable opening up in recent years, the impact of the slowdown in exports on the GDP is likely to be more moderate.

(...) [artículo aquí]

Wednesday, 25 February 2009


Qing Wang, Morgan Stanley, February 25, 2009

The Beginning of a Recovery?
Recent data indicate improvement, or ‘less-bad’ developments, in the underlying economic situation, raising hopes that China’s economy may have begun to recover. Many wonder what the potential recovery path in China will look like over 2009-10. In this context, the recent strong rally of China’s onshore A-share market has been interpreted by some market observers as leading signs that an economic recovery is underway.

V-Shaped and W-Shaped Recovery in 2009
Our assessment of China’s economic outlook remains unchanged, with GDP growth forecast at 5.5% for 2009 (see China Economics: 2009 Outlook Downgrade: Getting Much Worse Before Getting Better, January 18, 2009). Moreover, we expect the economy to get worse before getting better, with a V-shaped recovery over the course of 2009: after the sharp deceleration in 3Q-4Q08, the headline year-on-year GDP growth rate is expected to drop further and stay low in 1Q and 2Q before staging a rebound in 2H09.

However, in terms of sequential quarter-on-quarter growth, we think the economy will likely demonstrate a W-shaped recovery during 2009. GDP growth started to decline in 3Q08 and bottomed in 4Q after a hard-landing of the industrial sectors. We expect the economy to register rather strong positive growth in 1Q09, as de-stocking runs its course and trade finance normalizes to some extent. However, sequential growth should moderate again in 2Q09 after the technical rebound in 1Q, as the headwinds facing the economy likely remain strong. We envisage growth to accelerate in 3Q and 4Q09, as the effect of policy stimulus kicks in and G3 economic growth bottoms in 3Q and makes a tepid recovery in 4Q.

(...) [texto aquí]

Tuesday, 24 February 2009


Jason Clienfield

Bloomberg, February 25, 2009

Japan’s exports plunged 45.7 percent in January from a year earlier, resulting in a record trade deficit, as recessions in the U.S. and Europe smothered demand for the country’s cars and electronics.

The shortfall widened to 952.6 billion yen ($9.9 billion), the biggest since 1980, the earliest year for which there is comparable data, the Finance Ministry said today in Tokyo. The drop in shipments abroad eclipsed a record 35 percent decline set the previous month.

Exports to the U.S. tumbled an unprecedented 52.9 percent from a year earlier, and shipments to Asia and Europe also posted the largest-ever declines as the global recession deepened. The collapse is likely to force Japanese companies to keep firing workers and closing factories, worsening an economy that shrank the most in 34 years last quarter.

“The pressure on companies to cut jobs and investment is rising and that will make the recession deep and protracted,” said Yasuhide Yajima, a senior economist at NLI Research Institute in Tokyo.

Shipments to Europe slid 47.4 percent in January from a year earlier, the Finance Ministry said. Exports to China fell 45.1 percent and those to Asia dropped 46.7 percent.

Imports fell 31.7 percent from a year earlier. The drop in exports was in line with economists’ estimates. Analysts predicted a 1.2 trillion yen trade deficit.

(...) [artículo aquí]


BBC News, February 24, 2009

North Korea is believed to have more than 800 ballistic missiles, including long-range missiles which could one day strike the US. The BBC looks at Pyongyang's missile programme, which has mainly been developed from the Scud missile.

North Korea first obtained tactical missiles from the Soviet Union as early as 1969, but its first Scuds reportedly came via Egypt in 1976.

Egypt is believed to have supplied North Korea with Scud-B missiles and designs in return for its support against Israel in the Yom Kippur War.

By 1984, North Korea was building its own Scud-Bs and developed two new versions, the Scud-C and Scud-D. It has since developed a medium-range missile, the Nodong, and a long-range missile based on Scud technology, the Taepodong.

In July 2006 it test-fired a modification to the Taepodong, called the Taepodong-2, which experts say could have a range of up to 6,000km (3,500 miles). The missile blew up shortly after launch.


North Korea has a variety of short-range missiles. The KN-02 is thought to be the most accurate, but its range - around 100 km - is the shortest.

The Scud-B and C have ranges of 300 and 500 km respectively, while the Scud-D is believed to have a range of 700 km. It is thought that these missiles could deliver conventional warheads.

The Scud-B, C and D have all been tested and deployed. These missiles would enable North Korea to strike any area in South Korea.

The KN-02 missile, currently in the testing stage, could be aimed at key targets in South Korea such as military installations south of the border.

(...) [artículo aquí]

Sunday, 22 February 2009


James Rupert

Bloomberg, February 23, 2009

India’s 670 million voters may be about to set back President Barack Obama’s campaign against Islamic militancy in Afghanistan and Pakistan.

India’s ruling Congress Party, which heeded U.S. calls to avoid threatening its neighbor after November’s Mumbai terrorist attack, is heading for elections that might push it from office. The opposition Bharatiya Janata Party, which accuses Congress of a “soft approach” toward terrorism, says India should consider blockading Pakistan’s main port and severing ties unless the government extradites 20 suspected militants.
A less cooperative India would hamper Obama’s effort to keep Pakistan’s army focused on fighting the Taliban and other guerrillas along the Pakistan-Afghanistan border.

“The BJP is more hard-line now than when it was in power,” says Gareth Price, head of the Asia program at the Royal Institute of International Affairs in London. “There’s no question they would increase the pressure on Pakistan, and that would complicate matters for the Obama administration.” The likeliest outcome, he says, may be a weak coalition government led by one of the two large parties and including some of India’s burgeoning small parties.

This month, Pakistan ceded effective control of the Swat Valley, 250 kilometers (155 miles) northwest of Islamabad, in a truce with local Taliban. The Taliban’s gains threaten to further destabilize Afghan President Hamid Karzai -- and diminish pressure on al-Qaeda leader Osama bin Laden, who’s believed to be hiding in the region.

(...) [artículo aquí]

US expert claims China planning to use moon as military base

Iftikhar Gilani

Daily Times, February 22, 2009

NEW DELHI: A United States strategist on Saturday called for a greater Indo-US collaboration in defence and satellite technology to check China, which has gone overboard to sharpen its military arsenal.

Rick Fisher, senior fellow on Asian Military Affairs at the Washington-based International Assessment and Strategy Centre, raised concerns by giving a detailed presentation on China’s threat to the world and countries around it. Describing the Taliban and China as the greatest threats to world stability, he called on India and other world powers not to ignore evidences.

Speaking to a selected gathering of academics and strategists at the Observer Research Foundation, he claimed the Chinese International Department had remained in touch with the Taliban so much so that just ahead of the 9/11 attacks, Beijing was close to recognising the Taliban-rule in Afghanistan. He said the world had no choice but to plan countervailing capabilities and respond to the Chinese military build-up.

(...) [artículo aquí]

Saturday, 21 February 2009


Indira A.R. Lakshmanan and Eugene Tang

Bloomberg, February 21, 2009

U.S. Secretary of State Hillary Clinton and Chinese Foreign Minister Yang Jiechi agreed to broaden the Strategic Economic Dialogue and pledged to work together to combat the deepening worldwide depression.

“The foreign minister and I had a wide-ranging discussion that started from a simple premise: it is essential that the United States and China have a positive cooperative relationship,” Clinton said today at a press conference with Yang in Beijing.

China and the U.S. will continue the dialogue, begun during the Bush administration, while expanding it to include security and political issues. Clinton and Treasury Secretary Timothy Geithner will be involved in the talks, she said. Previously, Bush Treasury chief Henry Paulson led the U.S. side without State Department participation.
Yang, who said the two ministers discussed a “broad structure” for the talks, will visit the U.S. on March 9 to prepare for their resumption and to arrange President Barack Obama’s April meeting in London with Chinese President Hu Jintao.

Clinton thanked China for its continued purchases of U.S. Treasury notes, demand for which is needed to pay for Obama’s $787 billion stimulus plan. Yang said China, the world’s largest holder of Treasuries, will invest its almost $2 trillion in foreign-currency reserves based on the principles of ensuring liquidity and protecting value.

(...) [artículo aquí]


Dan Twining

Foreign Policy, February 20, 2009

In 1998, President Clinton flew over Japan without stopping to spend nine days in China. This led to acute concern in Tokyo over "Japan passing" -- the belief that Washington was neglecting a key Asian ally in favor of the region's rising star, China. Is the same thing happening today -- not with Japan, destination of Secretary of State Hillary Clinton's first overseas trip, but with India?

The construction of a strategic partnership with India was arguably President Bush's signal foreign policy accomplishment. Decades of estrangement between the world's largest democracies gave way to a strategic breakthrough akin to President Nixon's visit to China in 1972. Senior Bush administration officials believed that India could emerge as America's most important international partner over coming decades, given India's growing capabilities and a congruence of interests in defeating global terrorism, managing China's rise, sustaining an open global economy, and securing our common values.

For its part, the government of Manmohan Singh literally put its survival on the line for the United States, subjecting itself to a confidence vote in parliament in order to move forward with the civil nuclear cooperation agreement. Few other countries -- including America's closest allies -- have passed such a test.

But signs of trouble in U.S.-India relations emerged early on Barack Obama's road to the White House. As a Senator, he offered a killer amendment to restrict nuclear fuel supply to India during consideration of the civilian-nuclear agreement, which the Bush administration and India's supporters in Congress had to work hard to defeat.

(…) [artículo aquí]

Friday, 20 February 2009


Matthew Lee

Associated Press, February 20, 2009

SEOUL, South Korea (AP) — U.S. Secretary of State Hillary Rodham Clinton named a special envoy for North Korea on Friday but warned the communist nation that ties with the United States will not improve unless it stops threatening South Korea.

Amid a disturbing rise in belligerent rhetoric from the North toward the South and signs it may be getting ready to test-fire a ballistic missile, she urged Pyongyang to halt "provocative and unhelpful" gestures and rejoin stalled six-nation nuclear disarmament talks.

"North Korea is not going to get a different relationship with the United States while insulting and refusing dialogue with (South Korea)," Clinton told reporters at a news conference with South Korean Foreign Minister Yu Myung-hwan.

"We are calling on the government of North Korea to refrain from being provocative and unhelpful in a war of words that it has been engaged in because that is not very fruitful," she said.

Clinton, who also received a military briefing on the situation along the demilitarized zone between North and South Korea and discussed broader issues such as climate change and the global economic crisis with South Korean President Lee Myung-bak and Prime Minister Han Seung-soo, praised Seoul for its democracy and prosperity.


Earlier, Clinton said the new U.S. special representative for North Korea, Stephen Bosworth, a former U.S. ambassador to South Korea, would work with South Korea, Japan, China and others to look at ways to get Pyongyang back to the negotiating table and deal with broader policy.

Bosworth will also deal with North Korean human rights and humanitarian issues, she said, praising him as "a capable and experienced diplomat" who will report to her and President Barack Obama.

(...) [artículo aquí]

Thursday, 19 February 2009


Christine Ahn and Paul Liem

International Herald Tribune, February 19, 2009

'If North Korea is genuinely prepared to completely and verifiably eliminate their nuclear weapons program," Secretary of State Hillary Clinton said before she departed for Asia, "the Obama administration will be willing to normalize bilateral relations, replace the peninsula's longstanding armistice agreements with a permanent peace treaty, and assist in meeting the energy and other economic needs of the North Korean people."

Clinton's acknowledgment of the need to replace the armistice with a permanent peace treaty is a warm welcome to millions of Korean-Americans and Koreans hoping for a peaceful resolution to heightening tensions on the peninsula.

During her stop in Japan, however, she appeared to adopt the Bush administration's position that North Korea disarm as a precondition for normalization. Warning that a North Korean missile test would be "unhelpful" in moving relations with the U.S. forward, Clinton also stated, "If North Korea abides by the obligations it has already entered into and verifiably and completely eliminates its nuclear program, then there will be a reciprocal response certainly from the United States."

In the West, the conventional wisdom is that North Korea engages in "provocative" activity like missile testing in order to blackmail the United States into negotiations. What is forgotten, however, is that in the absence of an ongoing peace dialogue, the status quo between the United States and North Korea is that of two countries at war, held at bay only by a fragile truce.

For this reason, North Korea, as well as the United States and South Korea, routinely engage in war exercises and pursue modernization of their military technologies. In fact, the United States has committed to spending $10 billion on base construction in South Korea, and South Korea has begun to increase its military budget annually by 10 percent under its $665 billion Defense Reform 2020 Initiative.

(…) [artículo aquí]


Richard Halloran

The Washington Times, February 19, 2009

Secretary of State Hillary Clinton is on her first trip to Asia since taking office, with security issues high on the agenda. Lots of pretty diplomatic words have been expected from her and the Chinese, Japanese, Indonesian and Korean leaders with whom she confers.

Those suave utterances, however, mask stark underlying realities that affect the U.S. security posture in Asia. Those realities may confront Mrs. Clinton with difficult questions.

In Beijing, senior officers in the People's Liberation Army (PLA) have been testing U.S. resolve for at least a dozen years. One after another commander of U.S. forces in this region has felt it prudent to caution the Chinese neither to miscalculate nor to underestimate American determination to remain a power in the Pacific.

Moreover, the government of President Hu Jintao and the Communist Party are beholden to the PLA to stay in power. They have become uneasy because the international economic crisis, China's own faltering economy and repeated outbreaks of civil unrest have brought into question their mandate to hold office.

Mrs. Clinton has indicated she plans to take a firm line with the Chinese. In written answers during her confirmation hearings, she said: "This is not a one-way effort. Much of what we will do depends on the choices China makes about its future at home and abroad."

(...) [artículo aquí]

Wednesday, 18 February 2009

The U.S. ignored Beijing's request that it pay 1 percent of GDP to help China go green. It shouldn't.

Fred Guterl

Newsweek, From the magazine issue dated Feb 23, 2009

Gao Guangsheng has an odd sense of timing. In late October, as the global financial system was collapsing around him, he put the United States, Europe and Japan on notice that they would be getting a bill for a hundred years of pumping the climate full of carbon dioxide. The idea wasn't entirely new—the big industrial powers had been vilified before for despoiling the planet on their way to wealth and modernization, while asking China, India and other poor nations to do the right thing. But the demand took on an entirely new character coming from Gao, Beijing's climate czar. It didn't hurt that he was able to deliver a precise figure: 1 percent of GDP, which comes to more than $350 billion a year.

Western leaders handled Gao's statement as you might have expected in the middle of an economic crisis: they ignored it. Over the next few months, however, that tactic will be difficult to sustain. As climate talks begin to build toward a climax in Copenhagen in December, when a follow-on to the Kyoto Protocol is due to be drawn up, Gao's challenge stands as a gaping rift. It's the same rift that kept China, India and other relatively poor nations out of Kyoto and gave President George W. Bush an excuse to withdraw, putting climate-change policy on hold for the past eight years. The issue looms large over Hillary Clinton's first trip this week to Beijing as newly minted secretary of state. The longer the issue remains unresolved, the greater the chance that Copenhagen will end in a similar stalemate—and this time there'll be no George Bush to blame.

(...) [artículo aquí]


Helene Cooper

The New York Times, February 18, 2009

WASHINGTON — President Obama said Tuesday that he would send an additional 17,000 American troops to Afghanistan this spring and summer, putting his stamp firmly on a war that he has long complained is going in the wrong direction.

The order will add nearly 50 percent to the 36,000 American troops already there. A further decision on sending more troops will come after the administration completes a broader review of Afghanistan policy, White House officials said.

Mr. Obama said in a written statement that the increase was “necessary to stabilize a deteriorating situation in Afghanistan, which has not received the strategic attention, direction and resources it urgently requires.”

At least for now, Mr. Obama’s decision gives American commanders in Afghanistan most but not all of the troops they had asked for. But the decision also carries political risk for a president who will be sending more troops to Afghanistan before he has begun to fulfill a promised rapid withdrawal of troops from Iraq.

Many experts worry that Afghanistan presents an even more formidable challenge for the United States than Iraq does, particularly with neighboring Pakistan providing sanctuary for insurgents of the Taliban and Al Qaeda.

(...) [artículo aquí]

Tuesday, 17 February 2009


Dune Lawrence

Bloomberg, February 17, 2009

U.S. Secretary of State Hillary Clinton has touted her approach to diplomacy as “smart power.” That’s nothing new for China, which has employed economic, political and cultural persuasion under President Hu Jintao to build its image as a responsible world leader.

Now China’s gains as a regional partner and potential counter to U.S. influence are threatened by a slowdown in growth that may reduce its economic clout. At the same time, President Barack Obama’s pledge to reverse Bush-era policies that diminished America’s authority creates added competition for China’s “soft power” -- a phrase coined by Harvard professor Joseph Nye.

The changes may expose China’s communist government to more scrutiny as the country’s leaders launch a reported 45 billion yuan ($6.6 billion) program to expand the reach and impact of its state-run media.

“If you want to promote something, you have to make sure the thing you’re promoting is acceptable to other countries,” says Zheng Yongnian, director of the East Asian Institute at National University of Singapore. “Soft power means other parties accept your values.”

While China has clocked nearly 10 percent annual growth for three decades and is now the world’s third-largest economy, the influence its money can buy has been offset by distrust among some nations of its political system.

(...) [artículo aquí]

Monday, 16 February 2009


Pablo Bustelo

Revista de Economía Mundial, nº 20, 2008, pp. 75-97

Este trabajo explora si las economías de China y de la India son y van a ser fundamentalmente complementarias (el escenario “Chindia”) o, por el contrario, esencialmente competitivas (el escenario “China + India”) entre ellas. En el primer caso, los efectos podrían ser un desplazamiento más rápido hacia Asia del centro de gravedad de la economía mundial y quizá la aparición de un nuevo tipo de globalización, alternativa a la basada en la hegemonía de Occidente. En el segundo, esos efectos se verían reducidos mientras que el impacto sobre los países desarrollados se vería redoblado. En el trabajo, se analizan, en primer lugar, los grados de complementariedad y competencia en el comercio internacional de bienes y servicios, tanto en mercados internos como terceros. En segundo término, se estudian brevemente los grados de complementariedad y competencia en otros campos: inversión extranjera directa y otros flujos de capital, así como energía y otras materias primas.

[artículo en PDF aquí]


Massimo Calabresi/Washington

Time, February 16, 2009

North Korea has a long history of communicating with the United States through provocation and brinksmanship, and it has played to type ahead of Secretary of State Hillary Clinton's four-nation trip to Asia that began Sunday. In recent weeks, Pyongyang has annulled its maritime border with South Korea, renounced the non-aggression agreement between the two countries, and moved missiles and equipment around in ways that could signal preparations for a launch, according to U.S. officials.

For her part, Secretary Clinton has responded with understated coolness, continuing the State Department practice of publicly and privately encouraging the North not to do anything stupid. On Friday, she told reporters, "We hope that North Korea will refrain from provocative actions and words at this point." And before her departure, U.S. diplomatic sources say, the State Department weighed in with the Chinese in hopes that they can dissuade any bad behavior by Kim Jong Il.

Washington's latest contact with the Chinese is, in many ways, more interesting than the predictable pre-trip posturing by Pyongyang. Change is afoot in Washington, and China, which controls much of the food and fuel that keeps North Korea afloat, has more reasons than usual to try to help. Where Clinton's goals on the Japan, Indonesia and South Korea legs of the trip are fairly straightforward, U.S. policy towards China is in flux, and there are opportunities for Beijing to shape and take advantage of a new relationship with Washington.

(...) [artículo aquí]

Friday, 13 February 2009


Keith Bradsher

The New York Times, February 13, 2009

TAIPEI, Taiwan — America’s new secretary of state is preparing to visit Beijing with an agenda that barely mentions Taiwan — and that is fine with the president of Taiwan.
President Ma Ying-jeou said here on Thursday that he was glad to have reduced tensions with mainland China and that he was not concerned that Taiwan was low on Secretary of State Hillary Rodham Clinton’s list of priorities.

The lessening of tensions with the mainland “is good news for everyone, we are not dissatisfied with the fact they did not mention Taiwan,” President Ma said in an hourlong interview at the presidential palace.

Asked what Mrs. Clinton could do on relations between mainland China and Taiwan, long a top priority for Beijing, Mr. Ma asked for little help. “America can play a constructive role in encouraging the status quo,” he said.

But having largely removed relations between Taiwan and the mainland as a potential flash point since he took office last May, Mr. Ma mapped out changes that he wanted from Washington. A free-trade agreement between Taiwan and the United States topped the list, followed by visa-free access for Taiwanese travelers to the United States and a bilateral extradition treaty.

(...) [artículo aquí]

Thursday, 12 February 2009


Ariana Eunjung Cha

The Washington Post, February 12, 2009

China's exports dropped 17.5 percent and imports plunged 43 percent in January from the same month a year earlier, underscoring just how quickly its once-white-hot economy is slowing down and adding to the threat of further unemployment and social unrest.

Economists were quick to point out that the numbers released by the government customs office were heavily distorted by the fact that this year the weeklong Lunar New Year, China's most important holiday, fell in January while it was in February last year. Nonetheless, the drop was significantly more than the 12 to 14 percent expected by many analysts and much sharper than the 2.8 percent drop seen in December.

"[T]he underlying trade numbers suggest that the worst of both external and domestic demand is not yet over," Tao Wang, head of China economic research for UBS Securities, wrote in a research note to clients yesterday.

The deteriorating global economy has been devastating to Chinese exporters. Tens of thousands of factories in the southern manufacturing belt have closed down in recent months, leaving what the government estimates to be 20 million newly jobless migrant workers.

The data released yesterday show that while shipments to the world's largest economies fell significantly -- down 17 percent to the European Union, 10 percent to the United States and 9 percent to Japan -- shipments to China's neighbors plunged even more. Exports to the countries that make up the Association of Southeast Asian Nations were down 22 percent.

Denise Yam and Qing Wang of Morgan Stanley pointed out in a research note that because much of the trade between Asian producers is components and semi-manufactured goods, "further weakness can be expected from trade numbers out of the Asian exporters in the next few months."

(...) [artículo aquí]

Wednesday, 11 February 2009


Gordon G. Chang

Forbes, February 11, 2009

Hillary Clinton, breaking recent tradition, will go to Asia on her first trip abroad as secretary of state. Beginning the middle of this month, she will visit Japan, Indonesia and South Korea. The last stop on her itinerary will be China. China was also the last stop on Madeleine Albright's maiden trip in 1997 when she started in Europe and worked her way east. Both Condoleezza Rice and Colin Powell visited Europe and the Middle East on their first foreign visits.

Rich in symbolism, first trips are always important. To her credit, Mrs. Clinton is making Tokyo her initial stop. As she told the Senate last month, "Our alliance with Japan is a cornerstone of American policy in Asia."

Despite their importance, the Japanese have come to doubt their relationship with the U.S., and ties became strained toward the end of the Bush administration. They were worried about many differences they had with Washington--such as those over North Korea--but their real concern was that America would eventually abandon them in favor of the giant next door.

Indeed, it was Mrs. Clinton's husband who started the "Japan passing" fear by going to Beijing in 1998 and skipping Tokyo. The State Department, always concerned about angering the Chinese, said that Mrs. Clinton chose Tokyo for her first stop due to "scheduling" reasons, but that's not how the rest of the world sees it.

Yet few outside Japan will be watching when the secretary of state touches down in Tokyo. For one thing, Japan looks like it is in the midst of a historic political transition. The odds are that both Prime Minister Taro Aso and his Liberal Democratic Party will be out of power by September, the deadline for the next election for the Diet's lower house.

The Jakarta and Seoul stopovers will also be largely ignored by the global community. It is only when the planet's lone superpower pays a visit to its most populous nation that the world will start paying attention.

(...) [artículo aquí]

Tuesday, 10 February 2009


Gita Wirjawan

The Jakarta Post, February 10, 2009

No country can match the breadth and depth of American power in Asia. The United States has five treaty allies, the Pacific fleet, 80,000 troops, major military exercises, and billions of dollars of trade and investments. But over the last decade, the signals of US disengagement from the region have become at least as strong as the assets that prove its commitment. For countries in Asia, the key issue is whether they can rely on the US for the next 50 years in the same way they relied on it for the previous half century.

That makes the visit of US Secretary of State Hillary Rodham Clinton to Asia next week all the more significant. It will be the first attempt by the Obama administration at defusing perceptions of America’s waning commitment to Asia. In her first trip in her new role, Clinton will travel to China, Japan, South Korea and Indonesia. The itinerary suggests that she intends to take a closer interest in the region, more so than her predecessor.

But any hopes of a significantly revived US engagement should be tempered with realism. Clinton’s visit ultimately is more about optics than any fundamental changes in its policy towards the region.

The view in Jakarta and other Asian capitals is that President Barack Obama will continue existing US policies in the region for at least the next year or two, being bogged down by other more pressing issues such as Afghanistan and Iraq. He also has to deal with the global financial crisis and a battered American economy.

(…) [artículo aquí]

Monday, 9 February 2009


Jack Kim

Reuters India, February 9, 2009

SEOUL (Reuters) - South Korea's president said on Monday he had no intention of backing down to North Korea, which may be preparing to test-fire its longest range missile and in recent weeks has threatened to reduce its neighbour to ashes.

Analysts do not expect a major conflict between the divided Koreas but said the North's sabre-rattling was aimed at pressuring Seoul to drop its hardline policy and grabbing the attention of new U.S. President Barack Obama.

The following scenarios may still unfold:


The North has threatened a military strike over a disputed Yellow Sea border. It triggered clashes in 1999 and 2002 that killed or wounded dozens of sailors on both sides.

(...) [artículo aquí]

Sunday, 8 February 2009


Shantanu Nandan Sharma

The Economic Times, February 8, 2009

NEW DELHI: All it the brighter side of the current downturn. India may pip export-dependent China in the last quarter of FY09 and emerge as the fastest growing nation among all large economies.

As China’s GDP growth rate dropped to 6.8% during the October-December quarter and is expected to go down further, the Indian government has become hyper-active to achieve at least a 6.5% growth in Q4 to register a win over China.

If India achieves a better growth rate than China even for one quarter, the message will go across to the world and help India in wooing foreign capital, waiting to chase growth stories. Already, government officials in India have been highlighting reports of a few investment analysts who doubted China’s official GDP numbers and claimed that it could just be in the positive territory in the last quarter.

A secretary in the government of India confirmed to SundayET that India has a brighter chance of overtaking China in the last quarter of FY09, or Q1 in case of China which follows the calendar year.

“China is heavily dependent on exports and the way things are unfolding China’s GDP for January-March quarter would be quite low. We have so far achieved 7.9% and 7.6% growth in the first two quarters, according to the provisional numbers. Though our Q3 number, to be announced by month end, is expected to be less than the comparable number in China (6.8% in Oct-Dec, 08), the softening of interest rates will stimulate demand and ensure a faster growth rate than China in Q4,” he said.

(...) [artículo aquí]

Saturday, 7 February 2009


Asia Times, February 7, 2009

SEOUL - The time has definitely come to talk of nukes and ships and missiles, of why the sea is boiling hot and whether the pig has wings - or at least the notion of sending missiles into flight and exploding another nuke or two.

Yes, it's crunch time again on the Korean Peninsula. First, North Korea showed signs of wheeling a fearsome Taepodong-2 to the launch site, and now there's talk of a few lesser missiles being fired down the Yellow Sea. Shades of July 2006 when North Korea fired off seven missiles, including a Taepodong-2, four months before exploding its first nuclear device?

No doubt, only this time the North Korean tekkies had better get it right. Last time, the Taepodong-2 arced like a giant Roman candle, plunging into the waters off the east coast about 40 seconds after lift-off. Presumably, the scientists and engineers have now perfected the process and the missile will zoom off, possibly on a trajectory over northern Japan, the route of the Taepodong-1 more than 10 years ago.

But that's not all. Now experts are saying North Korea might also fire off a few missiles into the West or Yellow Sea, just to bolster its barrage of rhetorical defiance of the Northern Limit Line set by the United Nations Command after the Korean War. What better way to show that Dear Leader Kim Jong-il is not only alive and recovered from whatever terrible medical event laid him low in August - but is fully ready to celebrate his 67th birthday on February 16.

It's not at all likely Kim will be seen blowing 68 candles off a cake - Koreans count the day you're born as the first birthday - or bowing before a throng of well-wishers. There's not a chance he'll actually appear in public, waving his hands to prove the reports of a slight paralysis on the left side were all nonsense.

(...) [artículo aquí]

Thursday, 5 February 2009


Kent Ewing

Asia Times, February 6, 2009

Finally, 11 days after taking his place in the White House, United States President Barack Obama made a telephone call to Chinese President Hu Jintao. Both sides have given different versions of the conversation, but one thing they agreed on was that neither man mentioned "currency manipulation", the charge made against China by newly installed US Treasury Secretary Timothy Geithner during his confirmation hearings before the US Senate's Finance Committee.

Predictably, Beijing reacted to the allegation with righteous indignation, after which Vice President Joe Biden was quick to temper Geithner's words with remarks of his own. Add to that the president's choice to ignore the currency flap in his first presidential call to Beijing and it appears that the Sino-American relationship under the Obama administration is off to an awkward, ambiguous start.

While anti-China rhetoric may play well in the US Congress and with an American populace seeking a bogeyman for the economic hard times that have befallen the country, Chinese analysts regard this initial fumbling as a sign of Obama's naivete and inexperience in foreign affairs. They point to Premier Wen Jiabao's recently completed European "tour of confidence" as a superior example of diplomacy that the Obama team would do well to observe and emulate.

(...) [artículo aquí]

Wednesday, 4 February 2009


Jayshree Bajoria

CFR, February 4, 2009

Scope of the Threat
Since the 1990s, China has dramatically improved its military capabilities on land and sea, in the air, and in space. Recently, China has begun to project its military power beyond the Pacific Ocean by deploying a flotilla of small warships in December 2008 to the Gulf of Aden to aid in international efforts to fight Somali piracy. Historically, the United States is most concerned about the possibility of a conflict between China and Taiwan, though tensions between the two have lessened since 2008. But looking decades ahead, U.S. military planners clearly see the potential for China to develop as a "peer competitor." The U.S. Defense Department's 2008 report on China's military power says "much uncertainty surrounds China's future course, in particular in the area of its expanding military power and how that power might be used."

But experts say China is still decades away from challenging U.S. military's preeminence. Its ground forces field 1980s vintage armor and suffer from significant shortcomings in command and control, air defense, logistics, and communications. Its air force, too, lags behind those of Western powers, though China flies about one hundred top-end Russian Su-27 warplanes and has contracted to purchase newer Su-33s, which are capable of carrier-based operations. China plans to build aircraft carriers domestically, but currently has none under construction.

(…) [artículo aquí]


Nouriel Roubini

Forbes, February 5, 2009

William Pesek, a savvy Asia columnist for Bloomberg, reports, in his latest column, views about the structural crisis faced by Japan that I first outlined in a 1996 paper, "Japan's Economic Crisis." Thirteen years later, Japan is entering another severe slump, one that looks like even worse than that of other advanced economies. In the U.S., Europe and some other advanced economies, along with China, the second derivative of growth and of other economic indicators is approaching positive territory (i.e., growth is still negative, but GDP may be falling at a slowing rate). In Japan, it is still highly negative. There, the fall is accelerating, resembling a free fall--a severe case of stag-deflation.

The sad case of Japan's free fall is a cautionary tale of what happens when a high-flying economy has a real estate and equity bubble that goes bust, avoiding (for too long) doing the painful structural reforms and clean-up of the financial system that is necessary to avoid a lengthy, L-shaped near-depression. Japan had over a decade of stagnation and deflation, then a mild, sub-par growth recovery that lasted only three years, and is now spinning into another severe stag-deflation.

Keep alive zombie banks and zombie corporations with balance sheets and debts that haven't been restructured, as in Japan, and you end up in an L-shaped near-depression. Let me explain why the U.S. and the global economy face the risk of an L-shaped near-depression if appropriate policy actions are not undertaken.

First, note that Japan made many policy mistakes that the U.S. should and could avoid. Japan cut policy rates two years after the bust of its asset bubble, while the U.S. eased monetary policy aggressively after August 2007. Japan went into quantitative easing and reversed its zero interest rate policy too slowly; it waited two years after the bursting of its bubbles to do a fiscal stimulus (and reversed it too early with a consumption tax). The U.S. did one--albeit a failed one--last year, and is doing another large one now. Japan created a convoy system of zombie banks and corporations that were restructured too late, while the U.S. may become more aggressive in cleaning up the financial system. Japan had structural rigidities, like lifetime employment, that slowed down the adjustment, while the U.S. has flexible labor markets, with workers who have lost jobs moving fast to new sectors and regions where jobs are abundant.

(...) [artículo aquí]

Monday, 2 February 2009


Ishaan Tharoor

Time, February 3, 2009

The Sri Lankan army has Asia's longest-running insurgency on the ropes: The separatist Liberation Tigers of Tamil Eelam (LTTE) movement, long been considered one of the world's most fearsome guerrilla armies, lost its last stronghold at Mullaittivu on Jan. 25, and government officials are now confident of a decisive victory in the civil war that has claimed some 70,000 lives and displaced over a million people since 1983.

The LTTE is short on supplies and fighters, and has gone to ground in an ever ever-shrinking pocket of jungle in the northeast of the country as government forces advance. Sri Lankan President Mahinda Rajapaksa on Sunday called for the LTTE's surrender, but there is little chance that a rebel movement whose fighters over the years have chosen suicide over capture will go down quietly.

To understand how far the LTTE has fallen, consider the situation just three years ago, when an internationally brokered ceasefire collapsed: At that point, the rebels controlled around 5,800 square miles (15,000 sq. km.) of territory in a mini-state in the island nation's north and east. They had a navy composed of a flotilla of gunboats and transports, and even launched daring strikes on Colombo with their own makeshift airforce. But a sustained government offensive has inflicted defeat after defeat, and that, in turn, has prompted widespread desertions. Today, just over 1,000 fighters, including the LTTE's shadowy, ruthless leader, Velupillai Prabhakaran, have retreated into a wilderness of some 350 sq km, and are hemmed in on all fronts by emboldened government troops.

The government offensive has taken a heavy toll on the Tamil civilian population, leaving as many as 250,000 trapped in the war zone and vulnerable to crossfire. (Colombo insists the figure is closer 120,000). As many as 300 civilians have been killed in the last week of fighting, and human rights groups have accused both sides of abuses. The International Committee for the Red Cross (ICRC) claimed on Sunday that artillery shells landed in a makeshift hospital in rebel territory, killing at least 9 people and wounding 20 injured. And ICRC representative Sarasi Wijeratne in Colombo urged both sides "to allow the immediate evacuation of civilians and allow in the flow of essential medical supplies."

(...) [artículo aquí]

The two nations must first coordinate stimulus plans, then engage in currency diplomacy

Edward Gresser

YaleGlobal, February 2, 2009

WASHINGTON: As the United States bails out banks and shoe-factories close their doors in China, should the two governments worry about exchange rates?

The question arose after Timothy Geithner, new US treasury secretary, suggested in a congressional hearing that China is “manipulating” the value of its currency. China then fired back, echoed by a chorus of financial-gallery alarm over potential trade conflicts. But a reading of Geithner’s full comment should dispel fear of a looming trade war over exchange rates: What the US seeks is a coordinated approach to save both economies from sinking.

Geithner’s argument was that Chinese currency rates are a topic that both governments need to address, but not the immediate issue. Noting the manipulation point, he continued: “We look forward to a productive economic dialogue with the Chinese government on a number of short- and long-tem issues. The Yuan is certainly an important piece of that discussion, but given the crisis the immediate focus needs to be on the broader issue of stabilizing domestic demand in China and the US.… Because China accounts for such a large fraction of the world economy, a further slowdown in China would lead to a substantial fall in world growth (and demand for US exports) and delay recovery from the crisis. Therefore, the immediate goal should be for us to convince China to adopt a more aggressive stimulus package as we do our part to try to pass a stimulus package here at home.”

(...) [artículo aquí]

Sunday, 1 February 2009

Domestic consumers remain hesitant as they are called on to fill the gap left by a drop in exports.

Daniel Inman

Finance Asia, February 2, 2009

The latest set of GDP figures from China have confirmed the widely held belief that the economy is slowing, and slowing fast. In the fourth quarter of last year, the economy expanded by 6.8% year-on-year, the slowest growth since the fourth quarter of 2001, and significantly less than the 9% growth recorded in the previous quarter.

With global trade evaporating, China's economy must find less sustenance from exports, and more from domestic consumption. This is not a new idea - for years observers have pointed to China's over-dependence on exports. The effect of the current economic downturn is that the need for a change in focus has become more pressing.

The bad news is that China's consumers might not be there to fill the gap. A survey of consumer confidence in China conducted by Macquarie in December, and released mid-January, suggests that spending is expected to weaken. Confidence is important because if people are nervous, their savings will sit in bank accounts, contributing to deflation; while if they are more bullish, they are more likely to put money into stocks and shares, helping to revive the flagging economy.

The survey - which involved interviews with a total of 500 people in Beijing, Shanghai, Guangzhou, Xi'an and Chengdu - found that most people were aware of the subprime crisis in the US, and around 70% of those believed that it was detrimental to the Chinese economy.

The perceived short-term effects were less evident. When asked about how their economic situation had changed over the previous three months, twice as many said that things had become worse rather than better, but over 70% felt no change. A similar majority expected things to remain the same over the next three months, with 20% expecting things to get better and 20% expecting things to get worse.

(...) [artículo aquí]