China: the economic behemoth gives Australian mining a glimmer of hope | Business | The Guardian

Amid the general dim news about the end of the mining boom and the weakening of China came the announcement last week that the People’s Bank of China would cut its required reserve ratio (RRR) for banks by one percentage point.

This provided a brief moment of light for the mining sector as hopes grew that Chinese economic growth might stabilise. But it is also worth remembering that, while China will not again grow as fast as it did in the past decade, the size of its economy is now so large that it remains the economic behemoth that determines much of Australian’s own economic fortunes.

The RRR is the level of deposits Chinese banks must hold. The ratio is now 18.5%. While the cut in the RRR from the previous ratio of 19.5% is not the same as an interest rate cut – it doesn’t for example change the interest rate at which borrowers have to pay – it does give Chinese banks the ability to lend more money. This does mean that Chinese monetary policy has been eased – and quite aggressively. The RRR was also cut by 50 basis points in February, and at the same time official Chinese interest rates were also cut – from 5.6% to

via China: the economic behemoth gives Australian mining a glimmer of hope | Business | The Guardian.

Xi’s Star Turn in Indonesia Rings a Bell

 

Lesson from 1955 Bandung Conference: China’s peaceful demeanor didn’t last

ENLARGE

Chinese President Xi Jinping at the Asian-African Conference in Jakarta last week. Photo: Reuters

By

Andrew Browne

April 28, 2015 2:18 a.m. ET

 

On his way to a historic meeting of Asian and African leaders in Indonesia, President Xi Jinping stopped off in Pakistan.

His mission: to launch a $46 billion investment plan, the centerpiece of his project to forge a market of three billion people encompassing China, Central Asia and South Asia—almost half of mankind, the poorer half.

Mr. Xi’s ambitions to lead an economic resurgence of the developing world guaranteed him top billing at the 60th anniversary of the 1955 Bandung Conference. Back then, another Chinese leader, Premier Zhou Enlai, had dazzled his Asian-African audience with a similarly transformative vision for the postcolonial countries of the world.

Advertisement

Let’s hope Mr. Xi’s star turn bears more positive fruit.

Last week’s celebrations of the “Bandung Spirit” of Third World solidarity—the much heralded outcome of what Indonesia’s then-President Sukarno called “the first intercontinental gathering of colored peoples”–glossed over a crucial part of history. China in 1955 was on a charm offensive in the aftermath of the 1950-53 Korean War in which it backed the North Korean invasion of the South and fought U.N. troops, but its efforts to portray a less threatening face to the world didn’t last.

The suave Zhou—who spoke off the cuff at the assembly and swapped his Mao jacket for a pale blue lounge suit at side meetings—managed to get Beijing’s “Five Principles of Peaceful Coexistence” written into the closing declaration. China subsequently did its utmost to undermine them.

Under Mao’s xenophobic regime, China secretly funded and armed Communist insurgencies in newly independent countries still struggling to find their feet after World War II, and launched military attacks across its borders. Instead of championing the Third World, China turned against it.

ENLARGE

Zhou Enlai, left, is welcomed to the Bandung Conference by Indonesian Prime Minister Aly Sasto-Amidjojo on April 18, 1955. Photo: Agence France-Presse/Getty Images

The result: By the 1970s it had virtually no friends left in the world. China was an outcast.

The legacy of that era still poisons relations in East Asia. That’s the case even though China has spent the past three decades focusing on economic growth that has enriched some of its smaller Asian neighbors, and has sent aid and investment pouring into Africa and Latin America.

Yet, even as China trumpets anew its commitment to the “Bandung Spirit,” it undercuts its message once again with aggressive territorial moves in the East China Sea and the South China Sea. China claims “historic rights” over these waters; its neighbors contest those claims.

A China so ready to generously deploy the largest trove of national wealth in history by building ports, railroads, energy pipelines and other infrastructure around the region is, at the same time, raising the specter of the “Red Menace” it has worked so assiduously to bury.

And that task is far from accomplished. To this day, China has only two quasiformal allies in the region—Pakistan and North Korea. Because of China’s previous backing for Communist movements in Southeast Asia, including Malaysia, the Philippines, Burma and Thailand, ethnic Chinese in the region still encounter suspicion, racism, and doubts about their national loyalties. Relations between China and India, Asia’s two giants, remain mired in antagonisms that date back to 1962 when China launched a punitive border war against its neighbor.

Indian Prime Minister Narendra Modi skipped last week’s Bandung festivities, citing domestic commitments.

Meanwhile, Japan, the wartime aggressor, is able to paint its archrival China as the new threat to peace. At Bandung last week, Prime Minister Shinzo Abe took a dig at Beijing by decrying “the use of force by the mightier to twist the weaker around.”

“The wisdom of our forefathers in Bandung was that the rule of law should protect the dignity of sovereign nations, be they large or small,” Mr. Abe added

Even though Mr. Xi managed a smile and a handshake with Mr. Abe, those were not the sentiments that he wanted to hear at his moment of triumph in Bandung. From the vantage point of Beijing’s leaders, diplomatic problems with Japan as well as Southeast Asian allies of America stem from the role they play in a U.S. Cold War policy of “containment” aimed at blocking China’s rise. Indeed, the original Bandung Conference took place just as the Cold War was ramping up.

But then, as now, no one does a better job of containing China than China itself: Its aggressive moves have served to strengthen the U.S. alliance structure in Asia.

A meeting of Southeast Asian nations in Kuala Lumpur this week was overshadowed by China’s recent moves to reclaim land around fragile reefs to build sprawling facilities, including some with military applications. China dismissed warnings from the Philippines of a “worsening situation” in the region. For now, Manila failed to rally a joint front, but eventually China’s neighbors may draw closer not just to America but to each other for protection

In Indonesia Mr. Xi burnished his credentials as a benefactor to the world’s needy, promising preferential tariff treatment to the least-developed countries that have diplomatic ties with China.

But China is a contradiction. It represents the hopes of many underdeveloped countries in the region for a more prosperous life while, simultaneously, it raises fears about their own security. For China, this is the modern meaning of the “Bandung Spirit.”

Write to Andrew Browne at andrew.browne@wsj.c

SOURCE :

http://www.wsj.com/articles/xis-star-turn-in-indonesia-rings-a-bell-1430201915

China The New Super Power Documentary

China And The US: The AIIB Fiasco & America’s Colossal Loss Of Face

There is today, I think, little disagreement that the decision to invade Iraq in 2003 was the US’ most monumental foreign policy error since the Vietnam War. Until then during the previous four decades on balance the US could be described as a benign hegemon. With the collapse in the early 1990s of the Soviet Union as a military threat and Japan as an economic threat, the US emerged as the global uncontested hyper-power. Then with the illegal and ill-considered invasion of Iraq George W Bush blew it. In the last dozen years it has been pretty much downhill for both American power and American prestige.

The US, according to many, is in decline. That, however, does not mean that it is about to be replaced. As Zbigniew Brzezinski wrote almost twenty years ago (1997): ““No state is likely to match the US in the four key dimensions of power – military, economic, technological, and cultural – that confer global political clout.” It was true then, it remains true now. The US since Iraq may have lost a good deal of credibility in its hard power clout, but, as Professor Joe Nye repeatedly reminds us: it remains supreme in soft power; hence “the American century will survive the rise of China”.

via China And The US: The AIIB Fiasco & America’s Colossal Loss Of Face.