Duterte says China misunderstood Philippine minister’s South China Sea remarks


Philippine President Rodrigo Duterte announces the disbandment of police operations against illegal drugs at the Malacanang palace in Manila, Philippines early January 30, 2017.     REUTERS/Ezra Acayan

Philippine President Rodrigo Duterte announces the disbandment of police operations against illegal drugs at the Malacanang palace in Manila, Philippines early January 30, 2017. REUTERS/Ezra Acayan

Philippine President Rodrigo Duterte said on Friday he was not sure why China’s commerce minister had canceled a trip to his country, and that Beijing misunderstood his foreign minister’s comments about its militarization in the South China Sea.

Duterte said he wanted solid ties with China and there was no urgency in pressing it to abide by last year’s arbitration ruling on the Philippines’ maritime boundaries and sovereign rights, which went in favor of Manila and infuriated Beijing.

On Tuesday, Foreign Secretary Perfecto Yasay, the chairman of a meeting of foreign ministers of the Association of South East Asian Nations, said the region had “grave concerns” about China putting weapons installations on its manmade islands in the Spratlys.

“The problem is I think Secretary Yasay was misunderstood by the Chinese government,” Duterte said in a speech.

“I would like to assure China, and this is what I had committed to do when I was there, that we will talk as friends,” he said, referring to a trip he made to China last year.

China’s Commerce Minister Gao Hucheng decided at the last minute to postpone an official trip on Thursday to the Philippines to sign about 40 joint projects worth billions of dollars. No reason was given by either side.

However, on Friday, the Chinese government announced the appointment of a new trade minister to replace Gao, as part of a reshuffle ahead of a crucial Communist Party meeting later this year.

Establishing better relations with China has been a key plank of Duterte’s sometimes perplexing foreign policy, which has seen him lash out at major donors and investors such as the United States and European Union.

He is keen to tap China for loans, tourists and infrastructure.

On Friday Duterte said the Philippines’ longstanding alliance with the United States did not make it “duty bound to follow” Washington’s foreign policy, and conflict with Beijing was not an option.

“We cannot go to war because we cannot afford it,” he said. “And as much as possible, the bilateral relations between the two countries would be enhanced and improved and trade and commerce between the two countries greatly improved.”

But that could be affected by Yasay’s comments that ASEAN members were “unanimous in their expression of concern” about “very unsettling” developments. He mentioned China by name, something the 10-nation grouping is often reluctant to do.

China’s foreign ministry spokesman, Geng Shuang, on Thursday told a regular briefing that Yasay’s remarks were “baffling and regrettable”, and he hoped Yasay would “speak and act cautiously”.

(Reporting by Martin Petty and Neil Jerome Morales; Additional reporting by Ben Blanchard in Beijing; Editing by Robert Birsel and Clarence Fernandez)

Source: Reuters “Duterte says China misunderstood Philippine minister’s South China Sea remarks”

Note: This is Reuters report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.


Russia and China’s Enduring Alliance


Chinese President Xi Jinping shakes hands with his Russian counterpart Vladimir Putin during a welcoming ceremony in Beijing, China, June 25, 2016. Sputnik/Kremlin/Mikhail Klimentyev/via REUTERS

Chinese President Xi Jinping shakes hands with his Russian counterpart Vladimir Putin during a welcoming ceremony in Beijing, China, June 25, 2016. Sputnik/Kremlin/Mikhail Klimentyev/via REUTERS

A Reverse “Nixon Strategy” Won’t Work for Trump

By Jacob Stokes

Several commentators, among them Doug Bandow of the Cato Institute and Edward Luttwak of the Center for Strategic and International Studies, have suggested that U.S. President Donald Trump should take any efforts to warm relations with Russia one step further and try to enlist Moscow’s help in balancing a rising China. Trump views China and Islamist extremism as the two principal challenges to U.S. security, and he sees Russia as a potential partner in combating both. The thinking goes, then, that Trump should run a version of the diplomatic play that former U.S. President Richard Nixon and National Security Adviser Henry Kissinger followed in the early 1970s when they thawed relations with Beijing to counter the Soviet Union. This time, however, Trump would partner with Russia to balance China.

The proposal entices with visions of ambitious strategic gambits across Eurasia, in Trumpian vernacular the “big league” of geopolitics. Nixon going to China was one of the most consequential diplomatic deals in U.S. history. What better way for the dealmaker in chief—especially one who regularly consults with Kissinger—to burnish his credentials than carrying out a version of it for himself? In theory, the move would adhere to traditional maxims of geopolitics: namely, the imperative to maintain the balance of power on the Eurasian continent. U.S. strategists have relied on this principle to varying degrees since at least World War II. Further, a strategy that engages with Russia to counter China might lend a degree of coherence to the Trump administration’s otherwise disjointed foreign policy.

ALLIED ENOUGH

The problem for Trump is that Sino-Russian ties have been improving more or less steadily since the waning years of the Cold War. The thaw between the two communist powers began in the early 1980s and was followed by normalized relations in May 1989. Beijing and Moscow established a “strategic partnership” in 1996 and signed a Treaty of Good-Neighborliness and Friendly Cooperation in 2001. Chinese and Russian leaders now refer to the relationship as a “comprehensive strategic partnership of coordination,” a convoluted term for a not-quite alliance. Last September, Chinese State Councilor Yang Jiechi proclaimed that “the depth and scope of coordination between both countries are unprecedented.” Robust cooperation has accelerated since Xi Jinping became China’s top leader in 2012; he reportedly has a warm personal relationship with Russian President Vladimir Putin.

The two countries cooperate closely across a number of fields. On energy, Russia became the top oil supplier to China in 2016. Crucially for China, it transports supplies overland rather than through contested sea lanes. The nations have partnered on military exercises, including in the Mediterranean and South China Sea, as well as on some joint technology development projects. They have revived their languishing arms trade relationship. In 2015, Beijing agreed to purchase both Su-35 fighter jets and the S-400 Triumf surface-to-air missile system from Moscow. The two countries have also embarked on a number of symbolic people-to-people projects, such as beginning the long-delayed construction of a bridge across the Amur River. And in June 2016, Presidents Xi and Putin agreed to work jointly to increase their control over cyberspace and communications technologies.

A shared political vision for world order provides the foundation for Chinese-Russian cooperation. It is defined primarily by the desire to see an end to U.S. primacy, to be replaced by multipolarity. Once this vision is realized, each nation would command an effective sphere of influence in Asia and eastern Europe, respectively. For now, though, China and Russia have tenser relations with the United States than at any point since the end of the Cold War. This is primarily because of maritime territorial disputes in the East and South China Seas—including over the Diaoyu/Senkaku, the Paracel, and the Spratly island chains—and the war in Ukraine, making the Sino-Russian partnership more important than ever. A recent op-ed in the Chinese Communist Party mouthpiece People’s Daily called that relationship “the ballast stone in maintaining world peace and stability.”

A shared political vision for world order provides the foundation for Chinese-Russian cooperation.

In the 1970s, it was deep discord in the Sino-Soviet relationship that helped convince China to align with the United States. This discord culminated in border clashes in 1969. By 1972, relations between the two communist powers had deteriorated from frosty to outright frozen. When Kissinger came calling, Beijing already saw Moscow as a bigger threat than Washington. For Russia today, the opposite is true. Moscow sees Washington as the primary adversary despite hopes that Trump will repair the relationship.

Moscow sees Washington as the primary adversary despite hopes that Trump will repair the relationship.

To be sure, there is some potential for a rupture between China and Russia. Moscow worries about a lopsided economic relationship based on trading Russian resources for Chinese finished goods. China’s growing influence in Central Asia and the sparsely populated areas of eastern Russia, Moscow’s arms sales to India and Vietnam, and China’s theft of Russian weapons designs all threaten to derail the partnership. But the United States’ ability to fuel those disputes in order to foster divisions remains limited at best. Moreover, Xi and Putin have found a modus vivendi that downplays and contains those frictions while focusing on the cooperative aspects of their relationship. When Chinese leaders talk about a “new type of great power relations” with the United States, they envision something much like the Sino-Russian relationship as a model.

WEAK RETURNS

In exchange for turning against China, Moscow might seek the lifting of sanctions imposed following the annexation of Crimea, an end to U.S. support for a free and independent Ukraine, and acquiescence to the regime of Syrian President Bashar al-Assad. It may also demand a removal of missile defenses from Europe, the cessation of NATO expansion, or, even better from a Russian perspective, the abolition of NATO altogether. Granting Putin’s wishes on these issues would undermine the seven-decade U.S. investment in a Europe whole, free, and at peace—an investment that propelled the United States’ ascension to postwar primacy in the first place. What is more, accepting Russia’s acquisition of territory by force would undermine U.S. arguments about the prohibition of such actions under international law when Beijing asserts its expansive claims in the East and South China Seas using force.

Even if Trump convinced Putin to end Moscow’s partnership with Beijing, Russia would still have little capability to thwart China’s bad behavior in places that matter. Russia’s Pacific Fleet, although relatively sizable in number, suffers from severe shortfalls in maintenance, and many of its assets are aging. Planned additions to the fleet—including extra missile defense systems and submarines—will bolster deterrence capabilities but have limited applicability to the types of sea patrol tasks necessary to counter China’s maritime assertiveness. In theory, Moscow could help arm Asian nations to contribute to the balancing effort, but direct U.S. and other allied assistance could easily substitute for that, building relationships more advantageous to U.S. interests in the process.

Putin would also need to patch up diplomatic relations in Asia if he planned to balance against Beijing. Doing so would require a substantial diplomatic investment and, likely, Russian concessions. Putin’s ballyhooed rapprochement with Tokyo seems to have run aground despite clear eagerness on the part of Japanese Prime Minister Shinzo Abe for a deal to address the dispute over the Northern Territories islands, which Russia calls the Southern Kurils, as well as a peace treaty officially concluding World War II. And Russia’s continued support of North Korea and staunch opposition to the Terminal High Altitude Area Defense missile defense system has made for rocky relations with Seoul. The Russian position on the South China Sea—studied aloofness while agreeing to joint naval exercises with China—means that strategic relations in Southeast Asia would also require substantial diplomatic spadework (Putin’s warm relations with President Rodrigo Duterte in the Philippines notwithstanding).

FINDING LEVERAGE

A better U.S. strategy for competing effectively in the no-holds-barred contest of great power politics—including in “triangular diplomacy” with Moscow and Beijing—would focus on two lines of effort. First, the Trump administration should work with both Russia and China where possible. Those efforts should seek to forge a trilateral understanding on contentious issues affecting strategic stability, such as nuclear and missile defense issues, twenty-first-century definitions of sovereignty, and rules for armed intervention. Trilateral discussions should also build practical cooperation on areas of mutual interest, such as climate and energy, counterterrorism, and nonproliferation. Addressing frictions head-on and building habits of cooperation could mitigate strategic distrust among the three great powers by lessening the worry that two will cut deals at the expense of the other.

Second, Washington must continue to do the hard work of maintaining and building support among current U.S. allies and partners in both Europe and Asia, along with other increasingly powerful middle-tier states such as Brazil, India, and Vietnam. Such ties give the United States leverage over China and Russia, neither of which has similar worldwide networks of friendly states. The United States must assess the costs and benefits of finding and keeping friends overseas in a manner that looks beyond the narrow transactionalism Trump espoused on the campaign trail. Put simply, when considered in the context of a global competition for power and influence, a vast network of allies and partners starts to look more like an asset than a liability.

Trump seeks “good deals” with Russia. Cozying up to Putin in hopes of receiving Moscow’s help in balancing Beijing would not be one.

Source: Foreign Affairs “Russia and China’s Enduring Alliance”

Note: This is Foreign Affair’s article I post here for readers’ information. It does not mean that I agree or disagree with the article’s views.


China Promises Not to Use Currency Devaluation to Its Advantage


In its report yesterday on its exclusive interview with US President Donald Trump titled “Exclusive: Trump calls Chinese ‘grand champions’ of currency manipulation”, Reuters says:

President Donald Trump declared China the “grand champions” of currency manipulation on Thursday, just hours after his new Treasury secretary pledged a more methodical approach to analyzing Beijing’s foreign exchange practices.

In an exclusive interview with Reuters, Trump said he has not “held back” in his assessment that China manipulates its yuan currency, despite not acting on a campaign promise to declare it a currency manipulator on his first day in office.

However, on the contrary, Reuters says in the report, “China’s central bank has spent billions of dollars in foreign exchange reserves in the past year to prop up the yuan to counter capital outflows.”

Whatever the fact, China wants to satisfy Trump in order to have win-win cooperation with Trump. In another report yesterday titled “China says no intention of using currency devaluation to its advantage”, Reuters quotes Chinese Foreign Ministry spokesman Geng Shuang as saying in a daily media briefing, “China has no intention of seeking foreign trade advantages via an intentional devaluation of the renminbi. There is no basis for the continued devaluation of the renminbi”.

Geng’s promise on China having no intention of currency manipulation proves what I said in my previous posts that Trump has got what he wants in his telephone talks with Chinese President Xi Jinping.

He has got China to ban import of North Korean coal to pressure North Korea.

He has got China’s promise not to manipulate its currency.

It proves that he is a shrewd businessman and has used his shrewdness in US diplomacy. It also shows Chinese leaders’ wisdom in seeking win-win cooperation with the US.

Comments by Chan Kai Yee on Reuters’ reports, full text of which can be viewed respectively at http://www.reuters.com/article/us-usa-trump-china-currency-exclusive-idUSKBN1622PJ and http://www.reuters.com/article/uk-usa-trump-china-currency-idUSKBN1630VK.


Exclusive: Trump calls Chinese ‘grand champions’ of currency manipulation


U.S. President Donald Trump is interviewed by Reuters in the Oval Office at the White House in Washington, U.S., February 23, 2017. REUTERS/Jonathan Ernst

U.S. President Donald Trump is interviewed by Reuters in the Oval Office at the White House in Washington, U.S., February 23, 2017. REUTERS/Jonathan Ernst

By Steve Holland and David Lawder | WASHINGTON Thu Feb 23, 2017 | 6:55pm EST

President Donald Trump declared China the “grand champions” of currency manipulation on Thursday, just hours after his new Treasury secretary pledged a more methodical approach to analyzing Beijing’s foreign exchange practices.

In an exclusive interview with Reuters, Trump said he has not “held back” in his assessment that China manipulates its yuan currency, despite not acting on a campaign promise to declare it a currency manipulator on his first day in office.

“Well they, I think they’re grand champions at manipulation of currency. So I haven’t held back,” Trump said. “We’ll see what happens.”

During his presidential campaign Trump frequently accused China of keeping its currency artificially low against the dollar to make Chinese exports cheaper, “stealing” American manufacturing jobs.

But Treasury Secretary Stephen Mnuchin told CNBC on Thursday he was not ready to pass judgment on China’s currency practices.

Asked if the U.S. Treasury was planning to name China a currency manipulator any time soon, Mnuchin said he would follow its normal process of analyzing the currency practices of major U.S. trading partners.

The Treasury is required to publish a report on these practices on April 15 and Oct. 15 each year.

“We have a process within Treasury where we go through and look at currency manipulation across the board. We’ll go through that process. We’ll do that as we have in the past,” Mnuchin said in his first televised interview since formally taking over the department last week. “We’re not making any judgments until we go continue that process.”

A formal declaration that China or any other country manipulates its currency requires the U.S. Treasury to seek negotiations to resolve the situation, a process that could end in punitive tariffs on the offender’s goods.

The U.S. Treasury designated Taiwan and South Korea as currency manipulators in 1988, the year that Congress enacted the currency review law. China was the last country to get the designation, in 1994.

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The current situation is complicated because China’s central bank has spent billions of dollars in foreign exchange reserves in the past year to prop up the yuan to counter capital outflows.

The International Monetary Fund said last year that the yuan’s value was broadly in line with its economic fundamentals. The U.S. Treasury also said in its last currency report in October that its view of China’s external imbalances had improved somewhat.
Trump’s pronouncements about the yuan could also complicate matters for Mnuchin as he prepares for his first meeting next month with his Group of 20 finance minister counterparts in Baden Baden, Germany.

(Reporting by David Lawder and Steve Holland, Writing by David Lawder; Editing by Paul Simao)

Source: Reuters “Exclusive: Trump calls Chinese ‘grand champions’ of currency manipulation”

Note: This is Reuters report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.


China overtakes U.S., France as Germany’s most important trading partner


By Rene Wagner and Michael Nienaber | BERLIN Thu Feb 23, 2017 | 6:18pm EST

China for the first time became Germany’s most important trading partner in 2016, overtaking the United States, which fell back to third place behind France, data showed on Friday.

German imports from and exports to China rose to 170 billion euros ($180 billion) last year, Federal Statistics Office figures reviewed by Reuters showed.

The development is likely to be welcomed by the German government, which has made it a goal to safeguard global free trade after U.S. President Donald Trump threatened to impose tariffs on imports and his top adviser on trade accused Germany of exploiting a weak euro to boost exports.

German Vice Chancellor Sigmar Gabriel has even suggested that the European Union should refocus its economic policy toward Asia, should the Trump administration pursue protectionism.

“Given the protectionist plans of the new U.S. president one would expect that the trade ties between Germany and China will be further strengthened,” Germany’s BGA trade association said in response to the shift.

Neighboring France remained the second-most important business partner with a combined trade volume of 167 billion euros. The United States came in third with 165 billion euros.

In 2015, the United States became the top trading partner for Germany, overtaking France for the first time since 1961 thanks to an upturn in the U.S. economy and a weaker euro.

Looking at exports alone, the United States remained the biggest client for products “Made in Germany” in 2016, importing goods from Europe’s biggest economy worth some 107 billion euros.

France remained the second-most important single export destination for German goods with a sum of 101 billion euros, the data showed. Britain came in third, importing German goods worth 86 billion euros.

Britain accounted also for the biggest bi-lateral trade surplus: Exports surpassed imports from Britain by more than 50 billion euros, the figures showed.

The United States came in second with a bi-lateral trade deficit: German exports to the U.S. surpassed imports from there by 49 billion euros.

This means that Britain and the U.S. together accounted for roughly 40 percent of Germany’s record trade surplus of 252.9 billion euros in 2016.

The figures are likely to fuel the debate about Germany’s export performance, its trade surplus and global economic imbalances ahead of a meeting of G20 finance ministers and central bank governors in Baden-Baden mid-March.

(Editing by Jeremy Gaunt)

Source: Reuters “China overtakes U.S., France as Germany’s most important trading partner”

Note: This is Reuters report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.


Trump Succeeds in Having China Pressure North Korea Harder


North Korean leader Kim Jong Un watches a performance given with splendor at the People's Theatre on Wednesday to mark the 70th anniversary of the founding of the State Merited Chorus in this photo released by North Korea's Korean Central News Agency (KCNA) in Pyongyang on February 23, 2017. KCNA/via REUTERS

North Korean leader Kim Jong Un watches a performance given with splendor at the People’s Theatre on Wednesday to mark the 70th anniversary of the founding of the State Merited Chorus in this photo released by North Korea’s Korean Central News Agency (KCNA) in Pyongyang on February 23, 2017. KCNA/via REUTERS

In the above photo, Kim did not smile with a light heart perhaps due to China’s reduction of coal import from his country.

Reuters says in its report “Trump wants to make sure U.S. nuclear arsenal at ‘top of the pack’” yesterday that in an interview with Reuters, US President Donald Trump says that Beijing may rein in Pyongyang “very easily if they want to”.

I said in my post “The Conundrum of China-North Korea Relations 2” on February 21, “China does not want to punish North Korea too hard for fear of the collapse of North Korea’s Kim Jong-un regime” as it “may give rise to flood of hundreds of thousands North Korean refugees into China” or US and South Korea’s annexation of North Korea and thus depriving China of a buffer that separates the two from China.

Now by banning import of coal from North Korea, China has really pressured North Korea hard in accordance with Trump’s demand.

Judging by North Korea’s angry response, the ban really hurts. Reuters says in its another report titled “North Korea raps old ally China after China’s ban on coal” yesterday, “The North’s state-run KCNA news agency did not refer directly to China by name but in an unmistakable censure it accused a ‘neighboring country’ of going along with North Korea’s enemies to ‘bring down its social system’.

“‘This country, styling itself a big power, is dancing to the tune of the U.S. while defending its mean behavior with such excuses that it was meant not to have a negative impact on the living of the people in the DPRK but to check its nuclear program,’ KCNA said in a commentary.”

North Korea is shrewd in describing China as a big power losing face in obeying US demand, but Chinese leaders simply do not care because they are wise honest leaders. They do not mind losing face as long as their nation is much benefited in losing face.

They let the US take the lead in the dance as long as China and the US cooperate well in dancing to US tune that greatly benefit China. They know win-win cooperation with the US is too important for China’s economic prosperity and national security.

The reduction in coal import from North Korea does not hurt China as China has much excessive coal production capacity to cover the loss of import. North Korea will suffer losses less than US2 billion in lost coal export, but if China provides it with loan for paying import of food and other daily necessities from China, North Korean people will not suffer and North Korea’s political stability will not be affected. Only, Kim Jong-un will have less money for nuclear and missile development, which is good for not only the US but also China.

Comment by Chan Kai Yee on Reuters’ reports, full text of which can respectively be viewed at http://www.reuters.com/article/us-usa-trump-exclusive-idUSKBN1622IF and http://www.reuters.com/article/us-northkorea-china-idUSKBN1621G2.


China’s Homegrown Aircraft Carrier to Be Launched Soon


Airbus Defence and Space imagery dated 13 January showing China's Type 001A aircraft carrier hull nearing completion at Dalian shipyard. Prior to launch, remaining supports will be removed, as will objects within the dry dock. Source: CNES 2017, Distribution Airbus DS/2017 IHS Markit

Airbus Defence and Space imagery dated 13 January showing China’s Type 001A aircraft carrier hull nearing completion at Dalian shipyard. Prior to launch, remaining supports will be removed, as will objects within the dry dock. Source: CNES 2017, Distribution Airbus DS/2017 IHS Markit

Sean O’Connor, Indianapolis – IHS Jane’s Defence Weekly

23 February 2017

Key Points
•China’s Type 001A aircraft carrier is nearing completion, with most external structural work visibly complete.
•Following the addition of a red anti-fouling coating to the lower hull, little work remains before the 001A hull can be launched.

Airbus Defence and Space imagery captured on 13 January shows progress being made with China’s Type 001A aircraft carrier (CV) at the Dalian shipyard in northeastern China, where the carrier hull is progressing towards being launched.

Jane’s previously examined the status of the shipbuilding programmes at Dalian in August 2016. Since then the superstructure of the Type 001A CV has been installed, along with the aircraft elevators, and the remaining decking has been put in place. Minor work remains visible on deck, with a portion of decking seen temporarily removed in November 2016.

On 20 February state broadcaster China Central Television (CCTV) reported that some of the support equipment, possibly including support bracers or scaffolding around the upper surfaces, had been removed and that red paint had been applied to the hull. Red anti-fouling paint is used beneath the waterline to prevent the growth of marine organisms on the hull, which can affect performance.

The lack of major external components remaining to be installed on the Type 001A CV hull, and the presence of the red anti-fouling paint on the lower hull, indicates that it is nearing launch. The only major exterior work remaining involves surfacing and painting the flight deck. It may be possible to perform this task following launch, should the dry dock be required for another shipbuilding programme. A key indicator that the Type 001A is preparing for launch will be removal of extant support bracers currently in place within the dry dock, as well as any remaining equipment or materials residing on the dry dock floor.

Meanwhile, the 13 January satellite imagery also shows that the second Dalian-produced Type 052D guided-missile destroyer (DDG) is receiving weapons and sensors.

Source: IHS Jane’s 360 “China’s Type 001A CV makes progress at Dalian”

Note: This is IHS Jane’s 360’s report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.