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

The Conundrum of China’s New Silk Road Plan

Italian Prime Minister Paolo Gentiloni (who will attend New Silk Road summit) talks to the media at Chigi Palace in Rome, Italy April 7, 2017. REUTERS/Remo Casilli

In its report yesterday titled “China to gather friends for biggest summit of year on New Silk Road”, Reuters says, “While China has portrayed the New Silk Road as a genuine effort to share the bounty of China’s economic development and to fund infrastructure gaps, many Western countries are concerned about a lack of detail and transparency in the project and are suspicious about China’s broader political intents.”

China certainly is not so generous as to contribute billions of dollars to its New Silk Road projects for nothing in return. The sharing of bounty is but propaganda. China is simply not rich enough to do so. It has to first eliminate poverty at home and raise its own people’s living standards to a level similar to Western developed countries. To achieve those goals, China still has a long way to go.

Therefore, it helps other countries build infrastructures first of all for its own benefits, i.e. to provide alternative routes for import and export, which will facilitate not only its trade but also national security.

The most important are pipelines for import of oil and gas from Russia, Central Asia and the Middle East. The shipping route to the Middle East and Europe through Indian Ocean can easily be cut by powerful US navy. Russia and Central Asia offer alternative land routes, but the China-Pakistan Economic Corridor will be even better.

The roads, railways and pipelines to be built and expanded through the corridor will provide China with connections to the Middle East, Europe and Africa as there is military protection by Iran and Russia of the sea route from Pakistan’s Gwadar Port that China has been building. That trade route will facilitate the economic development not only in Pakistan but also China’s vast west.

In addition, China may move its labor-intensive industries to Pakistan to exploit the cheap labor there.

The New Silk Road projects are first of all for China’s own security and economic growth while enabling other countries along the road to become rich through win-win cooperation. Leaders of Western developed countries will not attend the New Silk Road summit as they do not think that their countries will be much benefited by the road. Only Italian Prime Minister will attend the summit as the sea route from Gwadar Port may connect to land route through Italy to Europe.

However, can China’s good relations with those small and poor nations along the New Silk Road in Asia enable China to replace the US as world leader? I don’t think Western leaders have such rich imagination as Reuters points out in its report.

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-idUSKBN17K0FL.

China invites Britain to attend new Silk Road summit: sources

FILE PHOTO: Chinese President Xi Jinping (R) shakes hand with British Prime Minister Theresa May before their meeting at the West Lake State House on the sidelines of the G20 Summit, in Hangzhou, Zhejiang province, China, September 5, 2016. REUTERS/Etienne Oliveau/Pool/File Photo

FILE PHOTO: Chinese President Xi Jinping (R) shakes hand with British Prime Minister Theresa May before their meeting at the West Lake State House on the sidelines of the G20 Summit, in Hangzhou, Zhejiang province, China, September 5, 2016. REUTERS/Etienne Oliveau/Pool/File Photo

By Ben Blanchard and Elizabeth Piper | BEIJING/LONDON Wed Feb 8, 2017 | 3:00am EST

China has invited British Prime Minister Theresa May to attend a major summit in May on its “One Belt, One Road” initiative to build a new Silk Road, diplomatic sources told Reuters, as London said she would visit China this year.

“One Belt, One Road” is Chinese President Xi Jinping’s landmark programme to invest billions of dollars in infrastructure projects including railways, ports and power grids across Asia, Africa and Europe.

China has dedicated $40 billion to a Silk Road Fund and the idea was the driving force behind the establishment of the $50 billion China-backed Asian Infrastructure Investment Bank.

China has so far given few details about who will attend the summit, to be held in Beijing.

The country’s top diplomat, State Councillor Yang Jiechi, told the official China Daily last week that leaders from about 20 countries have confirmed their participation, representing Asia, Europe, Africa and Latin America, though he did not give names.

One Beijing-based diplomatic source with direct knowledge of the invite list told Reuters that May was among the leaders who had been invited.

“China is choosing the countries it sees as friends and who will be most influential in promoting ‘One Belt, One Road’,” said the source, speaking on condition of anonymity.

Two other diplomatic sources confirmed May was on the invite list.

“It’s China’s most important diplomatic event of the year,” one of the sources told Reuters.

Chinese Foreign Ministry spokesman Lu Kang said plans for the summit are proceeding smoothly, and that details of the participants will be announced at a later date.

“China welcomes Prime Minister May to visit China at the appropriate time,” Lu told a daily news briefing.

Sri Lanka has already confirmed its prime minister is coming, and China says Philippine President Rodrigo Duterte is also attending.

Foreign leaders often combine attendances at important multilateral events China is hosting with official state visits to China.


Speaking in London, May’s aides confirmed she would visit China this year to discuss trade ties, the latest in a series of foreign trips to cement relations with major powers as she negotiates Britain’s divorce from the European Union.

May’s aides gave few details about the trip, but she is keen to strengthen her hand by securing foreign support before launching Brexit talks, which are set to be among the most complicated Britain has ever undertaken.

“It would be a renewed expression of the close relationship between Britain and China, something that you have seen obviously develop over the past few years,” May’s spokesman told reporters on Tuesday.

“I would imagine that trade would form some part of the discussions that we have.”

The Commerce Ministry has said China has an open attitude towards a free trade deal with Britain once it leaves the EU and was willing to study it, but Chinese officials have otherwise said little publicly about the subject.

May attended a summit in China of the G20 leading economies last September, shortly after she became prime minister following June’s referendum vote to leave the EU, and was invited by Xi to visit again.

With May having made clear she plans for Britain to leave the EU’s single market, trade has dominated her talks with foreign leaders in recent months.

She has secured assurances from U.S. President Donald Trump, Indian Prime Minister Narendra Modi and other world powers that they are keen to start talks on boosting links.

But her attempts to up the stakes in talks with the EU, which she is due to launch before the end of March, have also drawn criticism.

Some opposition lawmakers have accused May of ducking difficult issues to win promises for trade – a charge repeated when she became the first foreign leader late last month to meet Trump, who has since been criticized over his immigration curbs.

She also came under fire for strengthening ties with Turkish President Tayyip Erdogan, who has been criticized by rights groups for jailing tens of thousands of people after a failed coup in July.

(Additional reporting by Kylie MacLellan in London and Michael Martina in Beijing; Editing by William James, Catherine Evans and Lincoln Feast)

Source: Reuters “China invites Britain to attend new Silk Road summit: sources”

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 ‘Silk Road’ push stirs resentment and protest in Sri Lanka

Police clash with demonstrators during a protest against the launching of a Chinese industrial zone by China Merchants Port Holdings Company, in Mirijjawila, Sri Lanka January 7, 2017. REUTERS/Stringer

Police clash with demonstrators during a protest against the launching of a Chinese industrial zone by China Merchants Port Holdings Company, in Mirijjawila, Sri Lanka January 7, 2017. REUTERS/Stringer

By Shihar Aneez | HAMBANTOTA, Sri Lanka Thu Feb 2, 2017 | 5:06am EST

China signed a deal with Sri Lanka late last year to further develop the strategic port of Hambantota and build a huge industrial zone nearby, a key part of Beijing’s ambitions to create a modern-day “Silk Road” across Asia.

The agreement was welcome relief for the island nation of 20 million people. As they try to reduce the country’s debts, officials in Colombo see China’s plans to include Sri Lanka on its “One Belt, One Road” initiative as an economic lifeline.

China has spent almost $2 billion so far on Hambantota and a new airport and wants to spend much more.

But Beijing now faces a new and unpredictable challenge to its presence in Sri Lanka and broader Silk Road project.

Hundreds of Sri Lankans clashed with police at the opening last month of the industrial zone in the south, saying they would not be moved from their land. It was the first time opposition to Chinese investments in Sri Lanka turned violent.

Leading the campaign against the latest deal, which he says is too generous to China, is former President Mahinda Rajapaksa, an influential opposition politician who first allowed Chinese investment in Sri Lanka when he was leader from 2005-15.

The clashes, in which demonstrators threw stones and police used tear gas and water cannon, underlined the depth of resentment at China’s expansion felt by some local people, who feared they would be forced from their homes.

The Chinese foreign ministry said Beijing was doing what was best for both countries. The Chinese embassy in Colombo did not respond to a request for comment on investments in Sri Lanka.

The Sri Lankan protests are not the first sign of opposition to China’s One Belt plans to build land corridors across Southeast Asia, Pakistan and Central Asia and maritime routes opening up trade with the Middle East and Europe.

Rail links from China through Laos and Thailand have hit the buffers over resistance to what they say are Beijing’s excessive demands and unfavorable financing.


Under the original deal negotiated by Rajapaksa during his tenure, the container terminal at Hambantota was to be operated by a joint venture between China Harbor Engineering Co. and state-run China Merchants Port Holdings for 40 years.

The Port Authority of Sri Lanka would retain control of all other terminals in the harbor, as well as a 6,000 acre industrial zone.

But last month, the administration of Rajapaksa’s successor President Maithripala Sirisena, who came to office threatening to cancel high-value Chinese contracts on the grounds they were unfair, approved a deal to lease 80 percent of the port to China Merchants Port Holdings for $1.12 billion.

The company also got the lease for 99 years.

Officials said Sirisena’s hand was forced by the country’s high debt burden and the fact that inflows from countries including India and the United States were less than expected, despite a $1.5 billion, three-year IMF loan program agreed last year.

“A 99-year lease impinges on Sri Lanka’s sovereign rights, because a foreign company will enjoy the rights of the landlord over the free port and the main harbor,” said Rajapaksa.

“This is not an issue with China or with foreign investors. It is about getting the best deal for Sri Lanka,” he told Reuters in an interview.

The government also announced the lease of a much bigger 15,000 acres of land around the port for an industrial zone controlled by China Merchants Port Holdings, which has become a lightning rod for protests.

The demonstrators said they feared eviction from their land to make way for the site, a concern that China put down to a misunderstanding.

“Chinese companies have from the very start upheld the holding of talks and consultations with Sri Lanka on the basis of one’s own free will, equality and mutual respect according to market principles,” said Chinese foreign ministry spokeswoman Hua Chunying.

China Merchants Port Holdings declined to comment on the protests.


China has spent $1.7 billion building Hambantota port and the adjacent Mattala Rajapaksa airport, named after the former president, both of which are under-utilized and losing money.

Losses at the port added up to around $230 million in the five years to the end of 2016, according to the Sri Lankan finance ministry.

China’s ambassador to Sri Lanka, Yi Xianliang, said the country would invest $5 billion more in the next three to five years and create 100,000 jobs “if everything goes well.”

Last week, a policeman stood guard at the foundation stone of the proposed new zone in a forest clearing in Hambantota to prevent protesters from marching on the area.

“We are firmly against this project. We don’t want our land to be given to the Chinese. We are not leaving the area,” said Upul Dhammika, a farmer whose land is located where the government has tried to survey for the industrial zone.


Rajapaksa questioned the need for the Chinese to be given 15,000 acres, which he said was more than three times the area of all other economic zones in the country combined.

Isolated from the West over allegations of human rights abuses during the country’s civil war, Rajapaksa struck major deals with the Chinese when he was in power, including Hambantota and the nearby airport.

Sirisena, elected two years ago, vowed to review some of those agreements, including a $1.4 billion “port city” in the capital Colombo which was put on hold in 2015.

That, said a Chinese source with knowledge of the recent negotiations, upset Beijing, and so it pushed for the best possible deal on Hambantota.

“They (China) were really angry with the new government, until it agreed (to) an 80 percent port deal,” the source said, speaking on condition of anonymity because of the sensitivity of the talks.

The Chinese embassy in Colombo did not respond when asked about that aspect of the negotiations.

Beijing also threatened lawsuits when the new administration sought to review some of the old agreements, an official in the international trade ministry said.

China’s position was that it won the contracts on merit and a change of government should not have a bearing on these deals.

Sri Lankan Port Minister Arjuna Ranatunga said Hambantota port was losing money and the government had to go for a debt-for-equity deal to reduce the financial burden on the country.

Sri Lanka’s national debt stands at around $64 billion, or 76 percent of gross domestic product, one of the highest among emerging economies. It owes China over $8 billion.

For now, Hambantota remains a sleepy outpost. Four years after the port and airport were completed, there is one flight a day and barely five to six ships docking each week.

The highway leading to the town is largely deserted, a new conference hall is unused and even a large cricket stadium built by the Chinese is used mainly for wedding receptions.

(Additional reporting by Ranga Sirilal, Ben Blanchard in Beijing and Brenda Goh in SHANGHAI; Writing by Sanjeev Miglani; Editing by Mike Collett-White)

Source: Reuters “China’s ‘Silk Road’ push stirs resentment and protest in Sri Lanka”

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 One Belt One Road Stretches to London

A Chinese national flag, top, and a Union flag, also known as the Union Jack, sit next to each other against a backdrop of the first freight train to travel from China to Britain at the DB Cargo AG London Eurohub depot in Barking. Photo: Bloomberg

A Chinese national flag, top, and a Union flag, also known as the Union Jack, sit next to each other against a backdrop of the first freight train to travel from China to Britain at the DB Cargo AG London Eurohub depot in Barking. Photo: Bloomberg

According to SCMP’s report “First China-Britain freight train arrives in London as Beijing forges closer trade ties with Europe today”, the first direct cargo train arrived at London on January 18 after a 12,000km 18-days trip via Kazakhstan, Russia, Belarus, Poland and Western Europe

The train carries only 24 containers much less than a container ship that is able to carry 10,000 to 20,000, but it is much quicker.

Compared with air transport, 20 containers are much more than a cargo plane and train freight is much cheaper.

SCMP says, “China Railway already has more than 10 freight train services to several European destinations including Madrid and Hamburg. They are part of President Xi Jinping’s “One Belt, One Road” policy to revive the fabled Silk Road trading routes to the West, and London is the 15th city to be linked to the network.”

SCMP quotes Ramon Pacheco Pardo, an international relations lecturer at King’s College London as saying, “Economically [its significance] is still quite small. But politically it’s very significant because China wants to show it is connecting directly with Europe.” It means that China has an alternative route of trade with Europe even if its trade lifeline through the Indian Ocean is cut by US powerful navy.

Comment by Chan Kai Yee on SCMP’s report, full text of which can be found at http://www.scmp.com/news/china/diplomacy-defence/article/2063555/new-silk-road-1st-china-london-freight-train-arrives

China’s One Belt One Road Stretches to Africa

Trial services on the railway line began last October and regular services transporting goods and passengers are expected to begin early this year. Photo: Xinhua

Trial services on the railway line began last October and regular services transporting goods and passengers are expected to begin early this year. Photo: Xinhua

In its report titled “Why China-built electric railway linking landlocked Ethiopia to sea matters to Beijing and Africa”, SCMP says, “A US$3.4 billion electrified railway line built by China was officially launched on Tuesday to link the Horn of Africa to its inland countries.

“The line connects the strategic Red Sea port of Djibouti and Addis Ababa, the capital of landlocked Ethiopia, the fastest growing economy in Africa.”

This railway will connect China with landlocked African countries, a much longer stretch of China’s Silk Road.

It seems Chinese President Xi Jinping’s Chinese dream of Silk Road economic belt and 21st century maritime Silk Road (One Belt, One Road) will soon come true.

Comment by Chan Kai Yee on SCMP’s report, full text of which can be found at http://www.scmp.com/news/china/diplomacy-defence/article/2061124/why-china-built-electric-railway-linking-landlocked?spm=

China Is Transforming Southeast Asia Faster Than Ever

by David Roman December 5, 2016 — 4:00 PM EST Updated on December 6, 2016 — 1:03 AM EST

➞ Rising Chinese labor costs send companies to Cambodia and Laos

➞ Countries becoming more incorporated with China’s supply chain

China’s investment is transforming its smaller Southeast Asian neighbors like never before while helping turn Cambodia, Laos and Myanmar into bigger destinations for its exports.

That’s driving some of the world’s fastest economic growth rates and providing Chinese companies with low-cost alternatives as they seek to move capacity out of the country. It’s also helping Asia’s largest economy and nations in its orbit adapt to what looks more and more like a new era of waning U.S. commitment to the region from a more inward-looking administration of President-elect Donald Trump.

“China’s definitely looking at these countries in general as an area where it can sell products and get good return for its investments,” said Edward Lee, an economist with Standard Chartered Plc in Singapore. “China itself is getting more expensive for its companies, and that’s reinforcing this trend.”

China is investing in everything from railroads to real estate in Cambodia, Laos and Myanmar — the frontier-market economies of the Association of Southeast Asian Nations.


China Minsheng Investment Group and LYP Group, headed by Senator Ly Yong Phat, signed a $1.5 billion deal last week to build a 2,000-hectare city near Cambodia’s capital, Phnom Penh, with a convention center, hotels, golf course, and amusement parks, the official Xinhua News Agency reported. The spending equals roughly one-tenth of the country’s $15.9 billion gross domestic product.

Belt, Road

In landlocked Laos, work started last year on the China-Laos railway, which will stretch 414 kilometers (257 miles) from the border to the capital, Vientiane. The project, part of Chinese President Xi Jinping’s One Belt, One Road initiative, will cost $5.4 billion, according to Xinhua. Xi met last week with Lao Prime Minister Thongloun Sisoulith in Beijing, where he pledged stronger ties.

Myanmar, which is liberalizing its economy and adopting market reforms after a transition to democracy, is forecast by the International Monetary Fund to expand 8.1 percent this year, the fastest in the world after Iraq. De-facto leader Aung San Suu Kyi has been quick to engage China since taking office this year, including visiting Xi in Beijing. China is its largest trading partner, accounting for about 40 percent of Myanmar’s total last year, and is building a special economic zone, power plant and deep-water seaport on the west coast.

Cambodia’s economy is projected to grow 7 percent this year, while Laos is set for 7.5 percent expansion. Myanmar’s currency, the kyat, was Asia’s top performer in the first five months of the year, but has weakened about 10 percent against the dollar since June as the U.S. currency strengthened

As Sino-Cambodian relations have flourished, so has trade, with two-way commerce climbing to $4.8 billion last year. That’s more than double from 2012, the year Cambodia warmed up to Beijing by opposing mention of China’s assertiveness in the South China Sea during a regional summit in Phnom Penh.


Most Chinese money flowing in to Cambodia, Laos, and Myanmar is lending on highly concessionary terms to finance construction projects run by Chinese firms, especially in Laos, said Derek Scissors, Washington-based chief economist at China Beige Book International, who specializes in studying the country’s foreign investment. Chinese construction and investment since 2005 equal about 15 percent of Lao GDP, which it couldn’t have financed from other nations, he said.

“The power sector is basically Chinese-built, bringing electricity to the majority of the population,” while China built several hydroelectric plants to increase electrification, Scissors said. “There were grand plans for Myanmar, but investment and construction actually realized is more conventional, in the energy and mining sectors.”

Garments, Shoes

Cambodia, Laos and Myanmar are becoming more incorporated with China’s supply chains, buying intermediate goods from its factories and selling consumer items such as garments and shoes that are often made by companies owned or funded by China. Its imports from the three Southeast Asian economies more than doubled in the past five years, IMF data show.

The Phnom Penh Special Economic Zone, where a number of Chinese companies have set up factories. Photographer: Brent Lewin/Bloomberg

The Phnom Penh Special Economic Zone, where a number of Chinese companies have set up factories. Photographer: Brent Lewin/Bloomberg

Such dependence on China isn’t without risks. Beijing accounts for the largest chunk of foreign investment in Cambodia and also about 43 percent of the country’s total debt stock, mostly in loans from Chinese development banks to Cambodia’s government, according to the IMF. Similarly, China’s railroad in Laos equals about half of its $10.5 billion 2015 GDP.

“This reliance on a narrow production and export base has many downsides,” the IMF said in a recent report. “A majority of Cambodian garment factories concentrate on cut-make-trim processes, which are at the bottom of value chain and also small part of the overall production. As a result, firms in Cambodia have limited leverage and autonomy.”

Cambodia has gained particular appeal for Chinese manufacturers seeking to relocate, which aligns with China’s strategy to export industrial capacity through initiatives such as One Belt, One Road. Cambodia’s $121 average monthly wage is just a fifth of China’s $613 average, according to the International Labour Organization in Geneva.


The biggest risk for frontier Asean economies is that Chinese inflows create “extractive” elites who entrench themselves in power, said Song Seng Wun, an economist at CIMB Private Banking in Singapore.

“These economies are getting a lot of money and opportunity from China,” he said. “If wealth is concentrated in the hands of a few, that may lead to problems and instability. The key here is developing a middle income group that Chinese companies will be targeting as a consumer.”

Source: Bloomberg “China Is Transforming Southeast Asia Faster Than Ever”

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