Indonesia begins to embrace China’s yuan as trade and belt and road projects fuel uptake


An estimated US$2.7 billion’s worth of the country’s international trade was paid for using China’s currency in the first six months of this year

China has emerged as Indonesia’s largest trading partner over the past decade and is its second-biggest source of foreign direct investment

Amy Chew

Published: 12:00am, 20 Sep, 2020

The use of China’s yuan in Indonesia has been gaining momentum in recent years on the back of infrastructure projects linked to Beijing’s Belt and Road Initiative and the growing number of Indonesian companies doing business with those in China.

Over the past decade, China has emerged as Indonesia’s largest trading partner, with bilateral trade reaching US$79.4 billion in 2019 – a tenfold increase on the figure in 2000, according to data provided to The Jakarta Post by Xiao Qian, the Chinese ambassador to the country.

He added that more than 2 million Chinese tourists per year had visited Indonesia in recent years, while China is also the second-largest host of Indonesian students, with more than 10,000 studying in the country.

Dino Patti Djalal – a former deputy foreign minister of Indonesia and founder of the informal China Policy Group of officials, academics and policy experts – said this fast growing trade volume had made it “more attractive” for Indonesian companies to use renminbi when dealing with Chinese firms, as “in the first place, the Chinese are pushing for this”.

The yuan will be one of the world’s main payment currencies in the future

-– Kimin Tanoto, Indonesia’s Gunung Steel Group

However, he noted that some Chinese companies still prefer “having US dollars in the bank given its relative strength”.

Indonesia’s business community has also noted that more and more countries are starting to use renminbi for foreign currency reserves,” he said, adding that China was the second-largest foreign investor in the country last year with US$4.7 billion in investments – behind only Singapore, which pumped some US$6.5 billion into its Southeast Asian neighbour’s economy in 2019, according to figures released by Indonesia’s National Investment Coordinating Board in January.

Currently, Indonesia‘s trade with China is more than twice its trade with the United States and “given the large margin, it does not look possible for the US to overtake China in terms of its trade relations with Indonesia”, Djalal said.

Photo a freighter

A freighter loads containers for export at a port in East China’s Jiangsu Province on September 7. Photo: Xinhua

Though he noted “some concerns in using renminbi” owing to uncertainties brought on by the seemingly ceaseless US-China trade war, he predicted that the currency would be used “more and more by Asean economies” – especially as China’s economy was one of the few to rebound in the second quarter following the massive shock brought on by the coronavirus pandemic.

This means that Indonesian exports to China have not been as seriously affected as exports to other countries. It means there is a lot of hope pinned on China in terms of [Indonesia’s] economic recovery,” said Djalal, who is also a former Indonesian ambassador to the US and founder of the Foreign Policy Community of Indonesia think tank.

After a year-on-year contraction of 6.8 per cent in the first quarter – the first since 1992, according to Reuters – China recorded gross domestic product growth of 3.2 per cent in the second quarter, beating analysts’ expectations.

The country has largely brought the pandemic under control within its borders, with economic activity returning to about 90 per cent of pre-pandemic levels by the end of April, according to The Economist.

Indonesia’s GDP, by comparison, shrank 5.32 per cent year on year in the second quarter, as the largest economy in Southeast Asia continues to battle one of the region’s biggest outbreaks – with Jakarta alone recording more than 1,000 new cases a day on average this month.

Wisnu Wardana, an economist with Indonesia’s Bank Danamon, said the percentage of the country’s total international trade done using yuan had risen from 0.5 per cent in 2016 to 2 per cent in the first half of this year – or about US$2.7 billion’s worth of imports and exports.

In the past, local companies had been incentivised with discounts “should they pay in yuan to their counterparts in China”, Wisnu said, though he noted that such incentives have been “scaled back recently” and local companies have no knowledge of the reason.

Belt and road projects such as the US$6 billion high-speed rail line set to connect Jakarta to the textile hub of Bandung – which Deputy State-Owned Enterprises Minister Kartika Wirjoatmodjo said on Wednesday had been delayed until 2022 at the earliest, owing to pandemic-linked labour shortages – account for a sizeable chunk of the yuan’s use in Indonesia, though Wisnu noted that it is also used in sectors such as chemical products, electronics, food and beverages, shipping, stationery and plastics.

The yuan’s growth in Indonesia was also spurred by a bilateral three-year currency swap deal signed by the two countries’ central banks in 2018.

The agreement allowed the two sides to swap a total of 200 billion yuan (US$29.6 billion) for 440 trillion Indonesian rupiah (US$29.9 billion), to facilitate bilateral trade settlements and provide liquidity support to financial markets.

Earlier this month, analysts for US financial services firm Morgan Stanley forecast that the yuan could surpass the Japanese yen and pound sterling to become the world’s third largest reserve currency by 2030, accounting for between 5 per cent and 10 per cent of global foreign exchange reserve assets – up from the 2.02 per cent reported by the International Monetary Fund at the end of March.

Kimin Tanoto, a member of the board of commissioners for Indonesia’s Gunung Steel Group which exports to China and other countries, said the firm plans to start using yuan – instead of rupiah – in future as “risk management”.

We prefer to deal in renminbi with Chinese companies. If the facility is available, we are willing to execute our commodities purchases from China in renminbi,” he said.

It will be one of the world’s main payment currencies in the future.”

Additional reporting by Reuters

Source: SCMP “Indonesia begins to embrace China’s yuan as trade and belt and road projects fuel uptake”

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


US, India Fail to Hinder China’s Ways to Bypass Malacca Strait


In my previous posts I said China has three ways to bypass Malacca Strait for the security of its trade lifelines to the east: the Kra Canal, Railway through Laos, Tailand to Malaysia’s west coast and rail and road link between China’s Ruili and Myanmar’s Kyaukpyu port.

Due to Thai political instability, there is great political risk in building Kra Canal. The canal may provide a shortcut to bypass the crowded and pirate-harassed Malacca Strait. It will benefit not only China but also Japan and South Korea, but due to Thai political instability, no one will take the risk to build the canal.

Even the railway through Laos, Thailand and Malaysia has difficulties to go through Thailand. China has been building and will soon complete a rail way through Laos to Thai border. As the construction of the East Coast Railway in Malaysia has resumed only the section through Thailand is missing and Thailand does not seem willing to build a railway to connect the railways in Laos and Malaysia. Therefore, the second choise of a railway through Laws, Thailand to Malaysia’s western coast to bypass the Malacca still has to wait indefinately.

Now, China is fortunate to have made breakthrough in building China-Myanmar Economic Corridor in 2018. China is now building Kyaukpyu Port at full speed and the rail and road links between Ruili and Kyaukpyu have been under construction or planning.

The US certainly wants to hinder China’s efforts to bypass Malacca. It has been making great efforts to attract India to join its Quad to contain China. The two countries believe that China will bypass Malacca through Kra Canal. As a result, according to eurasiantimes.com’s report “India Responds to China’s Plans To Bypass Malacca Straits By Militarizing Indian Ocean Islands” on August 25, 2020, India is expanding its military bases in INS Kohassa, Shibpur in North Andamans and the Campbell strip at Nicobar in order to hinder China’s shipping through Kra Canal.

As now China will bypass the Malacca through rail and road in Myanmar and begin marine shipping from Kyaukpyu, Andamans and Nicobar are too far away from Kyaukpyu. Moreover, Myanmar has leased Coco Islands to China. If India uses its military bases in Andamans and Nicobar to hinder China’s shipping from Kyaukpyu to Hambantota China, can develop a military base on Coco Islands to counter that.

The Myanmar route will enable southern and eastern China to bypass Malacca while Chinese areas to the north can use the Arctic route as shortcut to bypass Malacca.

On the other hand, northwestern China can use China-Pakistan Economic Corridor to bypass Malacca.

As a result, China’s trade lifelines to the west will be free from hindrance in spite of US control of the Malacca Strait and India’s attempt to control the Indian Ocean,

Comment by Chan Kai Yee on Eurasian Times report, full text of which can be viewed at https://eurasiantimes.com/india-responds-to-chinas-plans-to-bypass-malacca-straits-by-militarizing-indian-ocean-islands/.


For developing world, Belt and Road Initiative is best deal around


China’s infrastructure offer supports economic growth in Europe, Africa and Asia

Shan Saeed

May 06, 2020 14:00 JST

A bridge construction site of the Bar-Boljare highway, pictured in June 2018: for Montenegro any concerns were far outweighed by the potential economic benefit of the new road. © Reuters

Shan Saeed is chief economist at Kuala Lumpur-based IQI Global, the largest real estate agency network in Southeast Asia.

China’s Belt and Road Initiative program is big — so big that it scares political leaders in Western countries while at the same time providing them with an easy target for criticism.

The BRI encompasses more than 130 countries. The World Bank estimates more than half a trillion dollars of BRI projects are planned, underway or already complete.

The intercontinental undertaking is of such scale and diversity that motivated critics have not found it difficult to pick out examples of corruption, self-dealing and overleveraging with which to tar the whole enterprise.

Yet much of the criticism of the BRI is misplaced. Many commentators tend to overlook the fact that the BRI often genuinely serves the needs of the developing countries where its projects take place.

As Richard Branson of the Virgin Group, which has infrastructure investment projects in India and other countries, said in 2017: “The Belt and Road Initiative is the only winning infrastructure strategy that can spur growth globally.”

Western governments and private companies have themselves not put enough money on the table for infrastructure projects in Asia and other developing regions. The Blue Dot Network recently launched by the U.S. is so small as to make China’s case for it; U.S. officials say the new program will catalyze private funding rather than deploy government money.

China’s program, on the other hand, is not only the world’s largest today, it is the largest in history. It is revolutionizing economic geography. Places that were backwaters — like the dusty town of Khorgos on the Chinese-Kazakh frontier or the Siberian outpost of Blagoveshchensk just inside Russia’s border with China — can become vital crossroads.

Developing countries that want to get infrastructure going quickly often have little alternative to the BRI. Djibouti wants $11 billion in investment to expand ports and other transport infrastructure. Serbia sought a new bridge across the Danube.

People attend a ceremony held to open the 1,507-meter long Mihajlo Pupin Bridge spanning the Danube River in Belgrade, Serbia in December 2014. © Anadolu Agency/Getty Images

Cambodia wanted industry and tens of thousands of jobs for its Sihanoukville Special Economic Zone. Officials in Thailand and Malaysia have been reluctant to embrace China’s terms for joint development of high-speed rail lines, but no other competitive offers have been put on the table.

It is not just that Western pocketbooks look puny compared with the enormous BRI money pot. It is also that the Western funds that are available often come with onerous strings attached that set limits on government spending and debt or require reforms intended to promote democratic decision-making and civil liberties.

China has been willing to invest in projects that Western funders reject, giving developing nations a chance to implement their highest priority investments.

Many BRI projects may be unbankable by Western standards. Even so, they can still be important to the countries involved and make sense to China.

Montenegro was looking for financing for a transnational highway to Serbia. Consultants hired by the EU’s European Investment Bank said the project would not attract enough traffic to be economically viable.

China’s financing threshold turned out to be much lower, perhaps because the project could help soak up excess industrial capacity and advance Beijing’s geopolitical goals. For Montenegro, however, any concern about those issues was far outweighed by the potential economic benefit of the new road.

Critics often lament that participation in the BRI leaves smaller countries dependent on China, which can then gain influence. But fears of such debt traps are overblown.

A study by U.S. research company Rhodium Group of 40 negotiations between China and debtor nations found that Beijing readily wrote off 40% of the value of problem loans. Debt trap concerns should also be dampened following President Xi Jinping’s declaration last April that Beijing will ensure the fiscal and commercial suitability of future BRI projects.

Moreover, China is learning from its mistakes. In its negotiations with Mahathir Mohamad, then Malaysia’s prime minister, Beijing showed a willingness to restructure its projects in his country to address his concerns about financial sustainability while keeping the developments moving forward.

While critics call China a bully, BRI countries might rather think of China as a generous friend. Most countries concerned welcome tighter ties to China.

Notwithstanding the impact of new coronavirus outbreaks, China has been growing much more quickly than Europe or North America and is transferring manufacturing jobs into other countries at a rapid pace. Its economic miracle is a model many want to emulate.

Xi has said that he wants the BRI to result in “win-win cooperation.” Despite the West’s resistance, many developing countries are more than willing to take him at his word.

If Western governments want to offer a serious alternative to the BRI, they will need to significantly scale up development aid budgets and consider loosening up governance and investment standards. They will have to tailor their offerings to appeal to developing countries rather than simply take their welcome for granted.

Source: Nikkei Asian Review “For developing world, Belt and Road Initiative is best deal around”

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


Pakistan PM Imran rejects CPEC’s criticism as ‘nonsense’


Anwar Iqbal January 24, 2020

In an interview with CNBC, Prime Minister Imran Khan explained that his government was now creating special economic zones to attract investment. — Screengrab courtesy CNBC

WASHINGTON: Prime Minister Imran Khan has rejected the criticism of the China-Pakistan Economic Corridor (CPEC) as ‘nonsense,” insisting that the project “is really helping” the country.

In an interview to a US news channel CNBC, shown on Wednesday night, Mr Khan also urged US President Donald Trump and the United Nations to mediate between Pakistan and India over Kashmir.

When the Chinese came to help us with this Belt and Road Initiative (BRI) and CPEC, we were really at the rock bottom,” said the prime minister when the interviewer, Hadley Gamble, asked if the project was a debt-trap for Pakistan.

So, we are really grateful to the Chinese that they came and rescued us,” he added.

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They came and pumped in, not just they gave us loans – and the loans, by the way are barely five or six percent of the total portfolio,” said Mr Khan, rejecting the suggestion that the CPEC was a debt-trap. “This is nonsense.”

Terms Kashmir far more serious a problem than people realise

The Chinese, he said, actually helped Pakistan with investment and because of them the country now “has an opportunity to attract foreign investment”.

The prime minister explained that his government was now creating special economic zones to attract investment. “We just opened two and we are opening more where we are giving special concessions to industries,” he said.

Mr Khan said the CPEC was “beyond BRI as China was also helping Pakistan in technology transfer. They are especially helping us in agriculture because Chinese technology (can boost) development (in this sector) much better than Pakistan’s as “our productivity is very low”.

The CPEC, he said, was also teaching Pakistanis the skills they needed to benefit from the CPEC projects. “They are building skill centers in Pakistan. So, they are helping us and we are grateful,” the prime minister said.

Earlier this week, senior US diplomat Alice Wells once again urged Pakistan to rethink its wholeheartedly embrace of China’s economic initiative. Speaking at a think-tank in Islamabad, she alleged that there was no transparency in the CPEC projects, and warned that the country’s debt burden was growing due to the Chinese financing.

Both Chinese and Pakistani officials have rejected the US criticism as misleading but the prime minister’s remarks further cemented the impression that Islamabad remains committed to the CPEC.

The prime minister spoke with CNBC in Davos, Switzerland, where he was attending the annual summit conference of the World Economic Forum.

When the interviewer asked how useful could the US president be in settling the Kashmir dispute, Mr Khan said: “I can’t say what would be the outcome but for me it is important to try my best because Kashmir is a far more serious problem than people realise.”

This is serious because there are two nuclear-armed countries,” the prime minister said. “That’s why I want President Trump, head of the most powerful country in the world — he should intervene right now. United Nations, or President Trump through the UN at least.”

Mr Khan explained that the possibility of an India-Pakistan conflict had increased because “India has been taken over by an extremist ideology, which is called Hindutva or the RSS.”

The prime minister said that the founding fathers of RSS were “inspired by the Nazis” and the Nazi concept of “racial purity” and “believed in ethnic cleansing, of Muslims.”

Mr Khan said that the ideology which was responsible for the assassination of Mahatma Gandhi and the group that was declared a terrorist organisation three times by previous Indian governments had now taken over India.

Responding to another question, he said the people of Kashmir, through a referendum could decide whichever country they wanted to join.

Now, that disputed territory has been annexed by India, and, they are trying to change the demography of (the) people of Kashmir, which according to the fourth Geneva Convention is a war crime,” he added.

The prime minister also expressed concern about ongoing protests in India over a controversial citizenship bill passed last December that many say is set to disproportionately affect Muslims.

Published in Dawn, January 24th, 2020

Source: DAWN “Imran rejects CPEC’s criticism as ‘nonsense’

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


Pakistan defends Chinese investment after U.S. official’s criticism


January 23, 2020 / 10:27 PM / Updated 12 hours ago

ISLAMABAD (Reuters) – Pakistan on Thursday rejected criticism of the $60 billion China-Pakistan Economic Corridor (CPEC), after a visiting U.S. official was quoted expressing apprehension over the plan.

While Pakistan has continuously defended Chinese investment, it has also attempted to mend relations with the United States. Prime Minister Imran Khan and U.S. President Donald Trump have held at least three one-on-one meetings over the last six months, the latest on the sidelines of the World Economic Forum in Davos on Tuesday.

U.S. officials have repeatedly criticized CPEC, under which Beijing has pledged about $60 billion for infrastructure in Pakistan, central to China’s wider Belt and Road initiative to develop land and sea trade routes in Asia and beyond.

Washington says the project is not sufficiently transparent and will saddle Pakistan with the burden of expensive Chinese loans. Pakistani newspaper Dawn reported that Alice Wells, U.S. Deputy Assistant Secretary of State for South and Central Asian Affairs, had made similar remarks at a closed-door think tank event in Pakistan on Tuesday.

Asked about the U.S. official’s comments, Pakistan’s foreign office spokeswoman, Aisha Farooqui, said CPEC was a transformational project for Pakistan, and completing it was the government’s highest priority.

To claim that CPEC is always in the form of loans and other forms of financing often non-concessional with sovereign guarantees is not based on facts,” Farooqui said during her weekly briefing.

Before coming to power, Khan had also questioned the transparency of CPEC projects and expressed concern over Pakistan’s rising debt burden. Since winning the 2018 election, he has tended to avoid such remarks, although some ministers in his cabinet have spoken of the need to renegotiate some deals.

The Chinese Embassy in Islamabad, in a statement on Wednesday, said: “The U.S. is obsessed with the story it [has] made for CPEC.”

If the U.S. truly cares about the development and prosperity of Pakistan and this region, it should bring cash and funds, promote win-win cooperation on the basis of mutual respect, fairness and justice, rather than act as a world policeman, spreading rumors and provoking China-Pakistan relations.”

Reporting by Gibran Peshimam; Editing by Peter Graff

Source: Reuters “Pakistan defends Chinese investment after U.S. official’s criticism”

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’s Xi Ensures Bypassing Malacca Strait


I have mentioned in my post “US Helpless as China Has Turned South China Sea into Its Lake” yesterday that with the deployment of J-20 for air supremacy and the construction of artificial islands, China has turned the South China Sea into its lake. The US is simply unable to win a war by direct attack at Chinese homeland.

However, powerful US military is still able to cut China’s trade lifelines though the oceans controlled by powerful US Navy. The trade lifelines through the Indian Ocean is especially vital for Chinese economy especially the imports of oil and gas from the Middle East and China’s shipping to EU, Middle East and Africa through Indian Ocean.

For security of China’s trade lifelines China has first to bypass the Malacca Strait, which can easily be blocked by US troops stationed in Singapore.

To do so, China has three alternatives, the best is to build a canal through Kra Isthmus (Kra Canal), which will shorten shipping route by 2,000 km for China, Japan and South Korea. However, as France, UK and USA all have to finally waive their ownership of Suez and Panama Canals, China certainly knows that it cannot own Kra Canal even if its construction is entirely funded by China. Build a canal all with its own funds to benefit not only itself but also Japan, South Korea, etc. is not a good idea. Moreover, Thai politics are not stable enough to ensure secure use of the canal.

Another alternative is a pan-Asian railway through Laos, Thailand and Malaysia to the west coast of Malaysia. China is building sections of the railway in Laos (China-Laos Railway) and Malaysia (East Coast Rail Link), but the construction of the section through Thailand has not been ensured. Moreover, there will certainly be political risks and diplomatic difficulties for a route through three foreign countries.

Therefore, the third and practically best alternative is the construction of a port at Kyaukpyu, Myanmar and a railway between Kyaukpyu and China’s Ruili.

This shortcut to bypass the Malacca Strait is much simpler as it goes through only one foreign country Myanmar, which is now politically stable and has close ties with China due to Western pressure on it over the Rohingya issue.

Reuters’ article “Myanmar, China ink deals to accelerate Belt and Road as Xi courts an isolated Suu Kyi” on January 18 says China and Myanmar signed 33 deals during Chinese President’s recent visit to Myanmar.

Among the deals are the projects of a deep sea-port in Kyaukpyu China has been building and a railway linking the port with China. Xi has thus ensured Southwest China’s trade route to bypass the Malacca Strait. That will be a major section of China’s 21sta century maritime Silk Road, the Road in China’s Belt and Road.

Reuters says that China is courting Myanmar, but from the video footage about Myanmar people’s enthusiasm in welcoming Xi, we see Myanmar is courting China for win-win cooperation with China to lift them out of poverty. China is courting Myanmar with its Chinese model of lifting people out of poverty and improving people’s living standard. That model has much greater impact than Rohingya issue. It is the major factor that enable the success of China’s BRI in Central Asia, Pakistan, Bangladesh, Sri Lanka, etc.

Another major section of the maritime Silk Road is the China-Pakistan Economic Corridor that links Northwest China with the Middle East and Africa.

Comment by Chan Kai Yee on Reuters’ article, full text of which can be viewed at https://www.reuters.com/article/us-myanmar-china/myanmar-china-ink-deals-to-accelerate-belt-and-road-as-xi-courts-an-isolated-suu-kyi-idUSKBN1ZH054


China sees Myanmar as stepping stone to Indian Ocean, energy security


Chinese President Xi Jinping will begin a two-day trip to Southeast Asian nation on Friday with hopes high he can help finalise details of a US$1.3 billion deal to develop Kyaukpyu port

But China’s growing presence in Indian Ocean is fuelling concerns in New Delhi

Laura Zhou

Published: 5:18pm, 15 Jan, 2020

Updated: 7:26pm, 15 Jan, 2020

Chinese President Xi Jinping’s upcoming trip to Myanmar is expected to help Beijing boost its presence in the Indian Ocean, especially if a deal can be finalised on the development of the China-funded Kyaukpyu port.

China’s ambassador to Myanmar, Chen Hai, said on Sunday that Xi was expected to oversee the signing of several deals during a two-day visit that starts on Friday, including possibly putting the final piece of the puzzle in the US$1.3 billion port deal, negotiations for which have been going on for several years.

Once completed, the facility on the Bay of Bengal will provide Beijing with a direct link to oil supplies from the Middle East, as Kyaukpyu is at one end of a massive oil and natural gas pipeline network that runs all the way to Kunming in southwest China’s Yunnan province. (underlined by this reblogger)

That direct link will provide an alternative route for China’s energy imports avoiding the Malacca Strait, which links the Indian Ocean to the South China Sea but has become a flashpoint for Sino-Indian maritime rivalry.

Kyaukpyu is at one end of a massive oil and natural gas pipeline network that runs all the way to Kunming in southwest China’s Yunnan province. Photo: AFP

The development of Kyaukpyu is part of Beijing’s wider plan to expand its footprint in South Asia, which has seen it invest heavily in Indian Ocean ports through its Belt and Road Initiative, much to the concern of New Delhi.

Archana Atmakuri, a research analyst at the National University of Singapore, said Beijing had a clear ambition in the region.

The port development projects, be they in Gwadar in Pakistan, Hambantota in Sri Lanka, Kyaukphyu in Myanmar or Chittagong in Bangladesh, are all happening in India’s backyard, and this feeds into China’s encirclement strategy towards India,” she said.

In 2015, a consortium led by Chinese state-owned Citic won the bid to develop the port in central Rakhine state at an estimated cost of US$7 billion. However, in 2018, the National League for Democracy – Myanmar’s ruling party – slashed the budget to US$1.3 billion amid concerns it would be unable to service the debt.

Xi’s visit comes amid growing rivalry between the world’s two most populous nations in South Asia and the Indian Ocean, an area that Delhi regards as its backyard.

Why the Andaman Sea is China and India’s new maritime flashpoint

Besides funding port projects in Hambantota and Gwadar, Beijing last month gifted two Type 053 frigates to Bangladesh, after giving a similar vessel to the Sri Lankan navy in June.

India will have a close eye on the visit,” Sampa Kundu, an assistant professor at Amity University in Uttar Pradesh, India, said.

But New Delhi has its own approach towards Myanmar.”

Atmakuri agreed, saying that under Prime Minister Narendra Modi, India had made more effort to cultivate ties with its Asian neighbours, such as working with Japan on a container terminal in the Sri Lankan capital Colombo and supporting the development of the Kaladan Multi-Modal Transit Transport project that is designed to connect the east Indian port of Kolkata to Sittwe port in Rakhine.

Xi Jinping is expected to meet Myanmar’s military chief General Min Aung Hlaing during his visit. Photo: AFP

Jabin Jacob, an associate professor at Shiv Nadar University in India, said tensions between Delhi and Beijing were likely to grow in the region.

Despite its limited resources, India’s navy is operationally superior to the Chinese navy in the Indian Ocean but the latter’s ability for grey zone operations and military diplomacy in the region suggests the balance is likely to shift in China’s favour,” he said.

Atmakuri said that as competition between the two nations intensified, concerns were growing among smaller countries that they might be forced to pick sides.

The question to ask is how small and middle powers react to this,” she said, “I think countries are preparing for the competition in the Indian Ocean.”

Xi will be the first Chinese president to visit Myanmar since 2001. During his trip he is expected to meet government leaders, including Aung San Suu Kyi, and military chief General Min Aung Hlaing.

Source: SCMP “China sees Myanmar as stepping stone to Indian Ocean, energy security”

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


High expectations for Xi Jinping’s visit to mark 70th anniversary of China-Myanmar relations


Two-day trip could be ‘milestone’ for relations if progress on Rohingya refugee crisis and stalled US$3.6 billion Myitsone dam project can be made

Xi’s visit could involve ‘dozens’ of cultural, political and economic agreements

Keegan Elmer

Published: 7:37pm, 13 Jan, 2020

Updated: 11:27pm, 13 Jan, 2020

Chinese President Xi Jinping will try to kick-start stalled Belt and Road Initiative projects and attempt to mediate in the Rohingya crisis during a two-day visit to Myanmar this week to mark the 70th anniversary of relations between the nations, analysts said.

Ties between Myanmar and China – its biggest trading partner – have strengthened rapidly in recent years, although violent conflicts and one of the world’s largest refugee emergencies pose major challenges to Beijing’s goals in the Southeast Asian country.

Xi’s visit is expected to begin on Friday, the first by a Chinese leader since Jiang Zemin 19 years ago, and may be a “milestone” for bilateral ties, according to Beijing’s senior envoy in Naypyidaw, Myanmar’s capital.

Xi would meet the country’s senior military and political leaders, and the two sides were expected to sign “dozens” of agreements in culture, politics and the economy, state newspaper Global Times quoted Chen Hai, China’s ambassador, as saying on Sunday.

He said Xi would meet President Win Myint and attend a banquet hosted by State Counsellor Aung San Suu Kyi, the country’s de facto political leader since 2016 and head of the ruling National League for Democracy (NLD).

Xi will also meet Min Aung Hlaing, commander of Myanmar’s armed forces and still a powerful political player following the country’s transition to democracy from military government in 2015.

The visit is expected to touch on topics such as long-stalled investment projects including the Myitsone dam, and Myanmar’s border crisis with Bangladesh.

Dr Renaud Egreteau, of the department of Asian and international studies at City University of Hong Kong, said that the trip would be a major diplomatic move by China’s leader.

President Xi certainly seems to want reassurance from Myanmar that under the NLD, the country will continue to adhere to its commitment to engage in an array of belt and road projects – some having lingered for more than a decade,” Egreteau said.

On Friday, Suu Kyi made a rare visit to northern Kachin state, which borders China and where the US$3.6 billion Beijing-funded Myitsone dam project has been idle since 2011 after residents protested about having to abandon homes, land and farms.

At a meeting to announce Xi’s trip to Myanmar, foreign vice-minister Luo Zhaohui said China and Myanmar were “still maintaining close communication” on the dam.

The northwestern state of Rakhine, a region of armed conflict and the heart of the Rohingya refugee crisis, will also figure in Xi’s visit.

An oil pipeline to Kunming in China’s southern Yunnan province and a seaport on the Indian Ocean are two belt and road infrastructure projects in Rakhine, where Myanmar’s military and thousands of ethnic Rakhine rebels clash.

Listing priorities for cooperation with Myanmar, Chen said China would “help Myanmar and Bangladesh resolve the Rakhine issue through negotiations”.

The biggest issues aren’t between China and Myanmar, but between Myanmar and Bangladesh,” said Wang Dehua, researcher at the Chinese Association for South Asian Studies, referring to the hundreds of thousands of Rohingya refugees who have sought shelter in Bangladesh. “China will try to mediate, this is clear,” he said.

But China has been the only major world power to support Myanmar’s handling of the crisis which has brought strong international criticism down on Nobel Peace Prize winner Suu Kyi.

Half a million minority Rohingya Muslims fled after Myanmar military attacks in 2017, which United Nations High Commissioner for Human Rights Zeid Ra’ad Al Hussein called “textbook ethnic cleansing”.

I think there are numerous expectations for Xi’s visit, but there is also trepidation that the high-level visit is predicated on China cashing in on its diplomatic support for Myanmar over the Rakhine crisis, and unsticking stalled CMEC [China Myanmar Economic Corridor] projects,” said David Mathieson, an analyst based in Yangon.

The Western opprobrium heaped on Myanmar was not mired by China, who balanced its strategic interests with shoring up support for the NLD government, and now it’s time for China to use that support to get its trade and infrastructure projects moving faster.”

Source: SCMP “High expectations for Xi Jinping’s visit to mark 70th anniversary of China-Myanmar relations”

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


China Will Take Belt And Road All Over Asia


In its report “’China Will Take Belt And Road All Over Unless…’: Sri Lankan President”, Agence France-Presse quotes Sri Lanka’s new president Gotabaya Rajapaksa as saying in his recent interview with The Hindu that Sri Lanka will be forced to seek finance from China again if India and western nations do not invest in the island. In addition, other Asian nations would also turn to China’s giant Belt and Road infrastructure project without alternative help.”

China seeks win-win cooperation so that it is even willing help developing countries so that it has taken risks for long-term benefits for both sides despite short-term losses. Other countries, however, want to make profits as much as possible. They certainly may not make investment so generously as China to help others; therefore, Belt and Road will certainly prevail in spite of Rajapaksa’s request for alternative help from other countries.

Comment by Chan Kai Yee on Agence France-Presse’s report, full text of which can be viewed at https://www.ndtv.com/world-news/china-will-take-belt-and-road-all-over-unless-says-lankan-gotabaya-rajapaksa-president-2141623.


Is This a Joke? US Launches ‘Blue Dot Network’ as Answer to China’s Belt and Road


It might as well be

The Comical Empire

Pepe Escobar 9 Nov 19 

Chinese President Xi Jinping six years ago launched New Silk Roads, now better known as the Belt and Road Initiative, the largest, most ambitious, pan-Eurasian infrastructure project of the 21st century.

Under the Trump administration, Belt and Road has been utterly demonized 24/7: a toxic cocktail of fear and doubt, with Beijing blamed for everything from plunging poor nations into a “debt trap” to evil designs of world domination.

Now finally comes what might be described as the institutional American response to Belt and Road: the Blue Dot Network.

Blue Dot is described, officially, as promoting global, multi-stakeholder “sustainable infrastructure development in the Indo-Pacific region and around the world.”

It is a joint project of the US Overseas Private Investment Corporation, in partnership with Australia’s Department of Foreign Affairs and Trade and the Japan Bank for International Cooperation.

Now compare it with what just happened this same week at the inauguration of the China International Import Expo in Shanghai.

As Xi stressed: “To date, China has signed 197 documents on Belt and Road cooperation with 137 countries and 30 international organizations.”

This is what Blue Dot is up against – especially across the Global South. Well, not really. Global South diplomats, informally contacted, are not exactly impressed. They might see Blue Dot as an aspiring competitor to BRI, but one that’s moved by private finance – mostly, in theory, American.

They scoff at the prospect that Blue Dot will include some sort of ratings mechanism that will be positioned to vet and downgrade Belt and Road projects. Washington will spin it as a “certification” process setting “international standards” – implying Belt and Road is sub-standard. Whether Global South nations will pay attention to these new ratings is an open question.

The Japanese example

Blue Dot should also be understood in direct comparison with what just happened at the summit-fest in Thailand centered on the meetings of East Asia, the Association of

Southeast Asian Nations and the Regional Comprehensive Economic Partnership (RCEP).

The advent of Blue Dot explains why the US sent only a junior delegation to Thailand, and also, to a great extent, why India missed the RCEP train as it left the pan-Asian station.

Indian Prime Minister Narendra Modi is still between a rock – Washington’s Indo-Pacific strategy – and a hard place – Eurasia integration. They are mutually incompatible.

Blue Dot is a de facto business extension of Indo-Pacific, which congregates the US, Japan, Australia – and India: the Quad members. It’s a mirror image of the – defunct – Obama administration Trans-Pacific Partnership in relation to the – also defunct – “pivot to Asia.”

It’s unclear whether New Delhi will join Blue Dot. It has rejected Belt and Road, but not, finally and irrevocably, RCEP. ASEAN has tried to put on a brave face and insist differences will be smoothed out and all 16 RCEP members will sign a deal in Vietnam in 2020.

Yet the bottom line remains: Washington will continue to manipulate India by all means deemed necessary to torpedo – at least in the South Asian theater – the potential of Belt and Road as well as larger Eurasia integration.

And still, after all these years of non-stop demonization, the best thing Washington could come up with was to steal Belt and Road’s idea and dress it up in private bank financing.

Now compare it, for instance, with the work of the Economic Research Institute for ASEAN and East Asia. They privilege the ASEAN Outlook on the Indo-Pacific, an original Indonesian idea, instead of the American version. The institute’s president, Hidetoshi Nishimura, describes it as “a guideline for dialogue partners” and stresses that “Japan’s own vision of the Indo-Pacific fits very well with that of ASEAN.”

As much as Nishimura notes how “it is well known that Japan has been the key donor and a real partner in the economic development of Southeast Asia throughout the past five decades,” he also extols RCEP as “the symbol of free trade.” Both China and Japan are firmly behind RCEP. And Beijing is also firmly stressing the direct connection between RCEP and Belt and Road projects.

In the end, Blue Dot may be no more than a PR exercise, too little, too late. It won’t stop Belt and Road expansion. It won’t prevent China-Japan investment partnerships. It won’t stop awareness all across the Global South about the weaponization of the US dollar for geopolitical purposes.

And it won’t bury prevailing skepticism about the development project skills of a hyperpower engaged on a mission to steal other nation’s oil reserves as part of an illegal Syrian occupation.

Source: Anti-Empire of checkpointasia.net “Is This a Joke? US Launches ‘Blue Dot Network’ as Answer to China’s Belt and Road”

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