GROUP OF TWO THE WRONG NUMBER

Henry C K Liu

Asia Times, June 19, 2009

As former US National Security Advisor Zbigniew Brzezinski's "Group of Two" (or G-2) concept of a US-China convergence in geopolitical interests is not yet official US policy, China is likely to merely keep monitoring signs of its evolution in US policymaking without direct formal official response, while exploiting the concept's diplomatic possibilities for improving bilateral relations.

Although China desires well-deserved recognition of it as a world power by the sole remaining superpower, albeit one that is fading, a G-2 in the context of hawkish realpolitik generally associated with Brzezinski's world view would go against China's long-standing preference for multilateralism that would allow it to form bilateral partnerships and special relations around the globe and to participate as an independent power in regional organizations.

China rejects G-2 concept

On May 20, at the end of the 11th China-EU summit held in Prague, attended by European Commission President Jose Manuel Barroso, Czech President Vaclav Klaus, whose country holds the rotating EU presidency, and EU foreign policy chief Javier Solana, Chinese Premier Wen Jiabao took the opportunity to assuage European concerns by dismissing as "groundless" the view that China and the United States - through the framework of a G-2 - will monopolize world affairs in the future.

(...) [artículo aquí]

WORLD BANK RAISES CHINA 2009 GROWTH FORECAST TO 7.2%

Bloomberg News

Bloomberg, June 18, 2009

The World Bank raised its growth forecast for China this year and advised policy makers to delay until 2010 any additional stimulus plan to boost the world’s third-largest economy.

China’s economy will expand 7.2 percent in 2009 from a year earlier, up from a 6.5 percent forecast in March, the Washington-based lender said in a quarterly report released today in Beijing. Stocks gained after the announcement.

The World Bank joins Goldman Sachs Group Inc., Morgan Stanley and UBS AG. in raising growth forecasts this year after a 4 trillion yuan ($585 billion) stimulus package triggered record loans and surging investment. China, the biggest contributor to global growth in 2007, is relying on government spending as exports slump because of the world recession.

The World Bank said it’s “too early” to say there is a sustained recovery, citing the economy’s dependence on the stimulus and echoing a State Council caution yesterday against excessive optimism.

It’s “not necessary, and probably not appropriate” for China to add fiscal stimulus this year, the World Bank said. Consumption is likely to slow, pushing down wages and employment, and the nation should retain room for stimulus in 2010, in case the global economy takes a turn for the worse, the bank said.

(...) [artículo aquí]

NORTH KOREA’S THREATS

The New York Times, June 17, 2009

North Korea is developing a frightening track record of making good on its threats. True to its word, in recent weeks it has conducted a second nuclear test and several missile tests. It also may have resumed making fuel for nuclear weapons. And the threats keep coming. Over the weekend, the North vowed to make more nuclear weapons and to take “resolute military actions” against efforts to isolate it.

Whether new sanctions adopted unanimously by the United Nations Security Council can deter even more dangerous actions is anyone’s guess. We know there is no chance if they are not implemented. The resolution leaves a lot of room for governments to avoid enforcement should they choose.

The resolution bars North Korea from selling weapons (ballistic missiles and parts are exports) or buying them. It authorizes states — but does not require them — to inspect cargo vessels and airplanes suspected of carrying North Korean weapons or nuclear technology. The North has sold missiles to Iran and other unsavory customers and a nuclear reactor to Syria.

It also calls on — but does not require — states and financial institutions to stop providing banking services, loans and credits that could support its nuclear or missile programs. That could have the biggest impact, if countries and banks heed the call.

(...) [artículo aquí]

S. KOREA SEEKS ASSURANCES FROM U.S. OF NUCLEAR SHIELD

Blaine Harden

The Washington Post, June 16, 2009

SEOUL, June 15 -- As state media in North Korea continued to warn of possible nuclear war, South Korean President Lee Myung-bak flew to Washington for talks on Tuesday with President Obama, from whom Lee is expected to seek a written promise of continued U.S. nuclear protection.

The United States has maintained a nuclear umbrella over South Korea since the Korean War, and it periodically reaffirms that protection, although not at the level of a White House statement.

North Korea tested its second nuclear bomb last month, triggering worldwide condemnation and cranking up anxiety in Seoul. When the U.N. Security Council imposed new sanctions on the North for that test, the government of Kim Jong Il quickly responded in the fist-shaking manner that has characterized its behavior this year.

It declared Saturday that it would never give up nuclear weapons and would start making more of them, using plutonium and enriched uranium. Until Saturday, North Korea had denied that it even had a program for making weapons with enriched uranium.

Shortly after the North detonated its first nuclear device in 2006, then-Defense Secretary Donald H. Rumsfeld assured his South Korean counterpart of the continuation of the U.S. nuclear umbrella. But South Korea now wants the promise in writing from the White House, according to South Korean published reports citing unnamed officials in Lee's office. A North Korean newspaper taunted Lee on Monday for "begging" for American protection. The Rodong Sinmun, the main newspaper of the North Korean Workers' Party, also accused Lee's government of an "atrocious scheme to wage a second Korean war with nuclear weapons on the back of its U.S. boss."

(...) [artículo aquí]

CHINA'S ECONOMIC GROWTH STILL RESPECTABLE, SAYS WB

China Daily, June 12, 2009

China's economic growth has remained respectable amid a difficult global environment, but it is still too early to say if the economy has really bottomed out, according to Louis Kuijs, senior economist, World Bank.

Kuijs noted that given the subdued prospects for the world economy, "more data is needed" to prove that China's current economic recovery is for real.

"With world demand weak and a lot of spare capacity available globally and also in China, there is a lot of downward pressure on manufacturing output," he told the spring membership meeting of the Institute of International Finance in Beijing on Wednesday.

China's economic growth hit a 10-year low of 6.1 percent in the first quarter, while the export sector, the key engine for economic growth, has not shown much signs of stabilization after slumping by 20.5 percent in the first four months. These could shave off two or even more percentage points of China's GDP growth, said Kuijs. China's growth is hardly different from the world, he said, given that the country's economy is more integrated into the world economy than many other major emerging markets.

(...) [artículo aquí]

CHINA SPENDS AWAY EXPORT WOES

Tina Wang

Forbes, June 11, 2009

HONG KONG--There appears to be no end in sight for China's exports slump, as exports data continue to be worse than expected. But China's capital spending boom, on the back of the country's stimulus package and record lending, is hastening the country's dependence for growth on aggressive policy measures and domestic demand. But observers don't expect the spending to be sustainable.

Exports in May plunged 26.4% from the same time last year, marking the seventh straight month of drops, and worse than April's 22.6% fall. That figure fell short of the market consensus forecast of a 23.1% drop.

Imports declined 25.2% in May, compared with a year earlier, and down from April's 23.0% drop, according to figures from the General Administration of Customs on Thursday. The country posted a trade surplus of $13.39 billion, with $88.76 billion in exports and $75.37 billion in imports.

Some analysts have warned that China risks a stalled recovery if Western demand does not rebound next year, unless there are further stimulus measures.

(...) [artículo aquí]

WHAT A WAR IN NORTH KOREA WOULD LOOK LIKE

Mark Thompson

Time, June 10, 2009

To fear a new Korean war is historically inaccurate, because, in fact, the last one never ended: The world's most dangerous border, across which some 2 million North Korean, U.S. and South Korean troops face each other along the 38th Parallel of the Korean Peninsula is, in fact, simply an armistice line. On July 27, 1953, the U.S. and North Korea signed a truce pausing, but not ending, a war that claimed more than 2 million lives, including those of 36,940 U.S. troops. And the North's recent nuclear and missile saber-rattling has many growing nervous about the potential for a resumption of hostilities.

North Korea, in fact, announced on May 27 that it was withdrawing from the armistice. It declared it could no longer guarantee the safety of ships sailing through the Yellow Sea off its western coast, and would no longer respect the legal status of several islands off South Korea's coast. It also vowed to attack South Korea if North Korean vessels suspected of smuggling nuclear and missile components are stopped and searched by a U.S.-led U.N. naval armada — a proposal currently under discussion.

U.S. officials are concerned that political instability inside the Pyongyang regime may actually raise the danger of confrontation. "Dear Leader" Kim Jong Il has been weakened by a stroke suffered late last year; his 26-year old heir apparent not yet ready to take the reins; and the North Korean military is eager to maintain its pre-eminence in the coming political succession. "Any time you have a combination of this behavior of doing provocative things in order to excite a response — plus succession questions — you have a potentially dangerous mixture," said U.S. Director of National Intelligence Dennis Blair on Monday.

(...) [artículo aquí]