Why the United States Is Losing Asia to China?

Foreign Policy published an article titled “The United States Is Losing Asia to China” by Ely Ratner and Samir Kumar on May 12, which this blogger finds quiet interesting.

The article begins with China’s One Belt, One Road summit and described it as “the latest manifestation of Chinese leadership at a time when U.S. commitment to the region is less certain than ever.”

The article mentions Senator John McCain’s proposal of a $7.5 billion “Asia-Pacific Stability Initiative” ($1.5 billion annually through 2022) that, though mentions making U.S. regional posture “more forward-learning, flexible, resilient, and formidable,” mainly focuses on the military such as improvement of military infrastructure, purchase of additional munitions, etc.

However, the article believes that for the near-term battle to resuscitate American power in Asia will rise and fall on economics instead of the military.

Trump seems to blame for withdrawing from the Trans-Pacific Partnership (TTP) aimed at containing China to make China unable to replace the US as leader in Asia. However, Democratic candidate Clinton who lost to Trump in the election also opposes TTP due to its failure to benefit the US. The US is too hard up to afford giving economic benefits to Asian countries at its own expense.

However, China’s One Belt, One Road benefits itself while benefiting other countries. Why is the US unable to do so?

Perhaps the US is too obsessed with military approach in its relations with other countries. It maintains the most powerful military machine in the world to scare others but fails to make them subdue to its leadership.

Why does the US fail to conduct win-win cooperation with other countries like what China has been doing so as to benefit both itself and others?

It is simply unable to do so as it lacks wise leadership at home to put its house in order so that it will have a growing economy and market to attract Asian countries.

Its media has been busy for decades to demonize China in order to make Asian countries believe they need US military protection. The problem is that though China’s military has grown much stronger, it prefers peaceful approaches in solving its disputes with other countries. It does not use its military to threaten other countries to subdue to it and accept its claims.

The obvious example is its disputes with the Philippines over Scarborough Shoal.

Before Philippine former president Aquino sent Philippine navy to drive away Chinese from the shoal, China, though has a much stronger navy, does not drive away the Philippines from the shoal and allow the Philippines to fish there. China drove the Philippines away merely in response to Philippines’ hostile move. That is all.

When Philippine resumes friendship with China, China allows the Philippine to go there again.

In addition, China provides funds for Philippines’ construction of infrastructure. That will certainly benefit China as China can export its excessive infrastructure industries and materials but the Philippines will be better benefited. That is win-win cooperation.

What the US has done to make the Philippines switch to China?

It provides the Philippines with its retired warships that are regarded as rubbish in modern warfare as its military aids. Can such ships fight China’s modern navy?

The Philippines has to depend on US protection. However, the US refuses to perform its obligations to protect Philippines’ interests in Philippines’ disputes with China.

That has made the Philippines realize that US has forged alliance with the Philippines to protect its own interests and contain its own potential enemy instead of protecting its ally the Philippines’ interests.

The Philippines has switched to Chinese side first of all due to military factor instead of economic factor.

The article is right that the US loses due to economic factors but fail to point out it also due to military factors as the US military is strong only in weapons but has no financial resources to support it to win a war even in a small country such as Afghanistan nor the military wisdom to achieve its strategic goal in wars as proved in its wars in Vietnam, Iraq and Afghanistan.

Comment by Chan Kai Yee on Foreign Policy’s article, full ext of which can be found at http://foreignpolicy.com/2017/05/12/the-united-states-is-losing-asia-to-china/

Can China Win over India while Helping Pakistan Grow Stronger?

Journalist take pictures outside the venue of a summit at the Belt and Road Forum in Beijing, China, May 15, 2017. REUTERS/Thomas Peter

Compared with narrow-minded India, China seems too broad minded. Just as described in Reuters’ report “India’s ‘new Silk Road’ snub highlights gulf with China” on May 20, China has failed to attract Indian leader to attend its OBOR summit.

India will certainly be much benefited if it joins China’s Silk Road economic belt and 21st century maritime Silk Road (One Belt, One Road or OBOR) plan by attracting Chinese investment and the establishment of the Bangladesh-China-India-Myanmar Economic Corridor.

China certainly will also be benefited by the connection to South Asia; therefore, it has tried hard to attract India into its OBOR. However, it depends on India’s willingness to put aside its disputes and conflicts with China and Pakistan and turn a new page in its relations with its two large neighbors.

India Prime Minister Norandra Modi attached great importance to India’s relations with China when he was just elected, but under the influence of popular enmity against China and fear of China’s rise, Modi has obviously changed his mind. He now seems to have regarded China as his enemy. It is certainly a stupid strategy to maintain instead of removing hostility with India’s large and strong neighbors China and Pakistan but narrow-minded India is too strategy illiterate to see the necessity in conducting friendly diplomacy with its neighbors. That is why Reuters mentions in its report some Indian experts’ view on India’s risk in being isolated, but Modi does not seem to realize that.

For China, however, winning over India serves its best interests. It has made great efforts to resolve its border disputes with India. Now, Reuters says in its report that China has tried hard in vain to have Modi and Indian high officials attend its OBOR summit.

However, supporting Pakistan has long been China’s strategy to reduce border threat from India. China loses nothing if it cannot win over India. On the contrary, India’s opposition will push Pakistan closer to China and facilitate the success of China-Pakistan win win cooperation to make both countries richer and stronger.

Perhaps, India is confident that it will grow stronger than China in the long run, but can it attain that goal in isolation?

Comment by Chan Kai Yee on Reuters’ report, full text of which can be viewed at http://www.reuters.com/article/us-china-silkroad-india-idUSKCN18H01L.

China’s Lending Wisdom in Its One Belt One Road Initiative

China has to lend its massive foreign exchange reserve. Previously, it lent to the US by purchasing of US treasury bonds. To avoid the risk, Chinese President Xi Jinping switched to lending to infrastructure projects in his Silk Road economic belt and 21st century maritime Silk Road (OBOR) plan mainly to countries in China’s backyard.

In its report “Behind China’s Silk Road vision: cheap funds, heavy debt, growing risk” yesterday, Reuters says that the OBOR “lending program of unprecedented breadth,” “could also leave some banks and many countries with quite a hangover”.

Certainly, there are risks and even serious risks in OBOR lending but are there no risks in lending to the US?

The US is heavily in debt but still get good rating for its debts. However, as US government is making no efforts to reduce its debts and its politics are in chaos now, the risks in lending to the US are by no means small compared with the lending to the countries with poor rating.

Moreover, there is in addition the risk of the falling exchange rate of US dollars.

Reuters says that the interest rates of the loans to OBOR are low, but are the interest rates of US treasury bonds high?

The most important in Xi’s OBOR lending strategy is that the lending to the US helps the US to maintain its excessive military budget in building and developing weapons to attack China such as B21 bombers that the US is developing for bombing Beijing.

In fact, China shall not lend even a penny to the US to enable the US to have the funds to deploy its military near China to threaten China. China buys US treasury bonds because it lacks alternatives.

Xi is wise to use China’s massive foreign exchange reserve to lend to countries within its OBOR plan. The infrastructures built by the lending, even if giving rise to bad debts, will first of all strengthen China’s national security instead of weakening that as the lending to the US does.

The infrastructures built under the OBOR plan will facilitate development of China’s and other countries economies. When those countries have grown rich, their politics will be more stable. China will be benefited by such stability in expanding its trade and investment there.

The lending to the US on the contrary will enable the US to have funds to invade other countries or interfere with their politics and thus may give rise to losses in China’s trade and investment there. Libya and Iraq are good examples.

The amount of lending to OBOR projects, though large, is but a fraction of China’s lending to the US. In fact, China shall gradually sell all its US treasury bonds and spend the proceeds mostly in OBOR projects since it is difficult to make good investment in the US and other developed countries.

Comment by Chan Kai Yee on Reuters’ report, full text of which can be viewed at http://www.reuters.com/article/us-china-silkroad-finance-idUSKCN18B0YS.

One Belt One Road Development of China’s Backyard

People wave Chinese and Union flags as they pose for photographs during departure of a freight train transporting containers laden with goods from the UK en route to Yiwu in the eastern Chinese province of Zhejiang. Photo: AFP

Like Latin America for the US, Central and Southeast Asia can be regarded as China’s backyard. Chinese President Xi Jinping has the vision to see the importance in developing those areas. China has already had great influence in Southeast Asia through trade and its rich overseas Chinese there. The collapse of Obama’s pivot to Asia has now left China as the only dominant power there.

US long-term close ally the Philippines’ switch to China’s side is a clear indication.

To strengthen China’s dominance there, Xi invented his 21st century maritime Silk Road to include in his One Belt, One Road (OBOR) initiative Southeast Asia that has never had anything to do with China’s Silk Road. Chinese investment in the infrastructures there will benefit both China and the overseas Chinese there.

What about Central Asia, the traditional part of Silk Road that links China with the Middle East and Europe?

Reuters says in its report “China’s COSCO to invest in Kazakhstan border project as part of Silk Road drive” yesterday that Chinese state-owned shipping giant COSCO “will sign a deal on Monday with Kazakhstan’s national railway company to take a 24 percent stake in a dry port in the Khorgos Eastern Gates special economic zone (SEZ)”.

Khorgos exchange is an important transport hub for change in railway gauges for the railway link between China and Europe. Through the railway network 27 Chinese cities have already connected with 11 European cities including London and Duisburg.

On April 24, SCMP published Tom Holland’s article “Puffing across the ‘One Belt, One Road’ rail route to nowhere” stating, “Compared to sea or air, the Europe-China freight service just makes no economic or environmental sense, either coming or going”

Mr. Holland simply regards the railway link between China and Europe as stupid as it is not cost effective and has no market.

However, it is of great strategic importance for China’s national security as it provides an alternative land route for transport of important goods between China and Europe in case China’s sea route is cut by enemy navy.

In addition, Xi wants to make those poor sparsely populated Central Asian countries rich by helping them exploiting their natural resources and providing jobs for their cheap labor. When those countries have become rich and filled with lots of Chinese immigrants, China will be better able to prevent illegal immigration and drug traffic from there.

The railway link between China and Central Asia and between Central Asia and Europe will greatly facilitate the trade of those inland Central Asian countries.

Those countries were formerly members of the Soviet Union so that Russia has great influence there. Xi’s efforts in establishing de facto alliance with Russia enable China to invest in infrastructures in and have close economic relations with them smoothly. The economic development in those countries will, in fact, also benefit Russia. Why shall Russia hinder China’s efforts?

China is even investing in infrastructures in Russia and lots of Chinese have moved into Russia now.

China now almost has the entire Asia as its backyard, allies or friends except India, Japan and South Korea.

India should regard Pakistan, Sri Lanka and Bangladesh as its backyard, but has failed to do so. It lacks the strategic flexibility to turn its most important neighbor Pakistan into its backyard or at least a friendly neighbor. India’s enmity has turned Pakistan into China’s close ally.

It is interesting that the US regards Latin America as its backyard. It has set up a free trade area with Canada and Mexico that draw its neighbors close to it. However, it now wants to scrap the free trade area or revise the terms of the area and thus push its neighbors away.

Perhaps the US is too rich and strong to need friends. It is happy to provide protection to all its allies without any consideration that it needs real allies that may help it when it is in trouble.

China, perhaps, is too poor and weak and has to build up its backyard and seek alliance and friendship.

Comments by Chan Kai Yee on Reuters and SCMP’s articles, full text of which can be viewed at http://www.reuters.com/article/us-china-silkroad-cosco-idUSKCN18A0KP and http://www.scmp.com/week-asia/business/article/2089507/puffing-across-one-belt-one-road-rail-route-nowhere.

Exclusive: U.S. complains to China about North Korea’s attendance at Silk Road summit

People take pictures in front of a “Golden Bridge on Silk Road” installation, set up ahead of the Belt and Road Forum, outside the National Convention Centre in Beijing, China May 11, 2017. REUTERS/Stringer

By Ben Blanchard and John Ruwitch | BEIJING/SHANGHAI Fri May 12, 2017 | 12:10pm EDT

The United States warned China on Friday that North Korea’s attendance at a weekend summit on China’s new Silk Road could affect the participation of other countries, casting a shadow over what is Beijing’s biggest diplomatic event of 2017.

Two sources with knowledge of the situation said the U.S. embassy in Beijing had submitted a diplomatic note to China’s foreign ministry, saying that inviting North Korea sent the wrong message at a time when the world was trying to pressure Pyongyang over its repeated missile and nuclear tests.

China’s Foreign Ministry did not immediately respond to a request for comment outside of working hours in China. The ministry said on Tuesday that North Korea would send a delegation to the summit but gave no other details.

Asked about the invitation to North Korea to attend, Anna Richey-Allen, a spokeswoman for the U.S. State Department’s East Asia Bureau, said the United States expected China to push its neighbor to return to “serious talks” on denuclearization.

“That includes taking steps to make clear to the (North Korean leader) Kim Jong Un regime the political, economic, and diplomatic consequences of its reckless and unlawful actions.”

The United States did not think it would be appropriate for North Korea to play a prominent role at the Belt and Road Forum, according to one of the sources familiar with the U.S. concerns.

The United States will send a delegation led by White House adviser Matt Pottinger to the summit, China’s Foreign Ministry said earlier on Friday.

U.S. President Donald Trump has asked China to put more pressure on North Korea, and has praised Chinese President Xi Jinping’s role in trying to rein in Pyongyang.

A source with knowledge of the note said that some Western countries could walk out of the specific session of the summit the North Koreans were attending if they were given too important a role, but that no decisions had been taken yet.

“This has generated a lot of concern,” the source said.

It was not immediately clear which sessions North Korea would attend. There are several sessions happening on Sunday afternoon, including on trade, finance and people-to-people exchanges. China has given few details about attendees.

North Korea’s chief delegate may also appear on stage in a group photo with other participants, said the same source, who is familiar with the planning for the summit.

China has not announced who that chief delegate will be, but South Korea’s Yonhap news agency said Kim Yong Jae, North Korea’s minister of external economic relations, will lead the delegation.


Leaders from 29 countries will attend the forum in Beijing on May 14-15, an event orchestrated to promote Xi’s vision of expanding links between Asia, Africa and Europe underpinned by billions of dollars in infrastructure investment.

Some Western diplomats have expressed unease about both the summit and the plan as a whole, seeing it as an attempt to push Chinese influence globally.

They are also concerned at the presence of leaders from countries with poor human rights records.

China has rejected criticism of the plan and the summit, saying the scheme is open to all, is a win-win and is only about promoting prosperity.

Some of China’s most reliable allies and partners will attend the forum, including Russian President Vladimir Putin, Pakistani Prime Minister Nawaz Sharif, Cambodian Prime Minister Hun Sen and Kazakh President Nursultan Nazarbayev.

However, the only leader from a G7 nation to attend will be the Italian prime minister, according to China’s foreign ministry.

Despite Chinese anger at North Korea’s repeated nuclear and missile tests, China remains the isolated state’s most important economic and diplomatic backer, even as Beijing has signed up for tough U.N. sanctions against Pyongyang.

China has over the years tried to coax North Korea into cautious, export-oriented economic reforms, rather than saber rattling and nuclear tests, but to little avail.

(Additional reporting by Michael Martina in BEIJING and David Brunnstrom in WASHINGTON; Editing by Mike Collett-White)

Source: Reuters “Exclusive: U.S. complains to China about North Korea’s attendance at Silk Road summit”

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

Xi Jinping’s One Belt, One Road Defeats Obama’s Pivot to Asia

Vietnam’s President Tran Dai Quang (behind L) and China’s President Xi Jinping (behind R) attend a signing ceremony at the Great Hall of the People, in Beijing, China May 11, 2017. REUTERS/Jason Lee

China has the economic resources to fund the construction of infrastructure in its neighbors and along its Silk Road economic belt and 21st century maritime Silk Road (OBOR). In doing so, China certainly takes political risks as quite a few of those countries lack political stability. Those countries will first be benefited while China will be benefited in the end if it is lucky enough. Anyway China can afford that.

China’s OBOR plan aims at benefiting itself through benefiting others with no intention to cause difficulties or contain any other countries but it in fact effectively counter US pivot to Asia that aims at containing China.

US pivot to Asia, however, solely aims at containing China. To make other countries join it, it creates the mythology of Chinese threat, but China’s OBOR initiative thoroughly breaks such mythology.

To attract other countries to join the US in containing China economically, former US president Obama almost succeeded in establishing his favorite Trans-Pacific Partnership (TPP) by promising some benefits to some Asian countries, but Obama’s successor Trump and Clinton who tried but failed to succeed Obama, both find that the US cannot afford giving others such benefits. Trump withdrew from TPP as soon as he was inaugurated.

Now, Reuters says in its article “China says has ‘positive’ talks with Vietnam on South China Sea” today, Vietnam, “the country most openly at odds with China over the waterway since the Philippines pulled back from confrontation under President Rodrigo Duterte”, has sent its president Tran Dai Quang to attend China’s OBOR summit.

Obviously, Vietnam also wants to be benefited from China’s OBOR initiative though, strictly speaking, it is not a country along the Silk Road. It will certainly be pleased if China is willing to provide funds for construction of its infrastructure. That will make Vietnam put aside its disputes with China in the South China Sea.

In its article “Why China’s trump card in global diplomacy is fraught with peril” SCMP points out the lots of risks in China’s OBOR plan in its article “Why China’s trump card in global diplomacy is fraught with peril” on May 10. Like other Western and pro-Western media, SCMP believes China’s OBOR initiative aims at expanding its world influence and perhaps replacing the US as world leader.

If so, China certainly will make efforts alone instead of inviting as many countries as possible to share the benefits of its OBOR plan. To have world hegemony, one shall make oneself much stronger than others instead of making others grow stronger along with oneself.

Xi is very pragmatic. Take Vietnam for example, it is quite enough that China funds Vietnam’s infrastructure to facilitate moving its labor-intensive industries to exploit Vietnam’s cheap labor.

For Southeast Asia that is far from Silk Road, the infrastructure funded by China will first of all facilitate rich overseas Chinese there in growing their business. As overseas Chinese love their motherland, China’s influence will be greatly expanded there.

What is the use of US pivot there compared with China’s OBOR initiative that has in fact nothing to do with Southeast Asia as the area has never been along China’s Silk Road.

In my opinion, China holds the OBOR summit to mark the collapse of US pivot to Asia and China’s success in resisting the pivot.

Comment by Chan Kai Yee on Reuters’ and SCMP’s articles, full text of which can respectively be viewed at http://www.reuters.com/article/us-china-vietnam-idUSKBN1871HH and http://www.scmp.com/news/china/diplomacy-defence/article/2093140/why-risks-abound-belt-and-road.

Japanese Abe’s Wisdom to Overcome His Anti-China Syndrome

Chinese President Xi Jinping (R) shakes hands with the chairman of Japan’s Liberal Democratic Party’s General Council Toshihiro Nikai during the China-Japan friendship exchange meeting at the Great Hall of the People in Beijing, China, May 23, 2015. REUTERS/Kim Kyung-Hoon

Usually in a traditional strict Asian family, a son is not close to his father but very close to his grandfather. Japanese Prime Minister loves dearly his grandfather who China regards as a war criminal that has played a major role in invading China.

American presidential election loser Hillary Clinton was stupid in giving US ex-president Obama the advice to contain China with TPP that hurts the US while hurting China and US pivot to China that proves US inability to attack China when China responded with its determination to fight a war to the threat of two US aircraft carrier battle groups that the US sent to China’s vicinity to force China to accept the Hague arbitration award that entirely denies China’s historical rights and interests to the South China Sea.

Abe, however, is wise instead of stupid in vigorously supporting TPP and pivot to Asia as he knows well a rising China has the potential to retaliate Japan’s war crimes in invading China in the 1930s and 1940s. Without US help, Japan is simply no match to a rising China. When China retaliates, Abe’s beloved grandfather’s reputation will suffer. No wonder Abe has anti-China syndrome.

Abe visited the US as soon as US President Trump was inaugurated in an attempt to persuade trump to continue Hillary’s policies to contain China. Trump told Abe he had satisfactory telephone talks with Chinese President Xi, hinting that he wants to improve ties with China instead of containing China.

In vain Abe has played his shrewd trick of using the US to contain China while making efforts to improve ties with China himself. He knows very well that like the US, Japan has lots of business interests in China and relies greatly on Chinese market for economic recovery. That is why Abe has tried his best to find opportunities to meet Chinese President Xi Jinping personally for improvement of relations with China.

From the above perspective, we know the essential needs for Japan to send high officials to attend China’s mid May One Belt One Road summit.

Reuters fails to see or perhaps simply ignores the facts of Abe’s efforts to improve ties with China. In its report “Japan’s ruling party heavyweight to attend China’s New Silk Road summit” yesterday, it ascribes Japan’s move to the tension caused by North Korea. The tension has always been there. It has nothing to do with Japan’s change of attitude towards One Belt One Road. Trump’s change in US attitude towards China has forced Abe to regard improvement of relations with China as priority. After all, Japan does not want the US to have better competitive edge than Japan in Chinese market.

Comment by Chan Kai Yee on Reuters’ report, full text of which can be viewed at http://www.reuters.com/article/us-china-silkroad-summit-japan-idUSKBN17R0KH