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India - China: Relations And Developments
Today's Wall Street Journal article (subsciption site hence posting in full):

This article says, among other things, that:

The Peoples' Liberation Army has proliferated nuclear and missile technology to Pyongyang in order to make money, and to build up North Korea as a strategic distraction for the United States. Moreover, it's now clear that someone in China abetted Pakistan's proliferation activities. That's because it would have been impossible for the transport aircraft involved in the nuclear technology-for-missiles exchange to fly from Pakistan to North Korea without refueling in China on route.

<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->THE WALLSTREET JOURNAL ONLINE, FEBRUARY 18, 2004

Persuading China to Rein in Pyongyang


For the United States, next week's talks in Beijing on the North Korean nuclear problem are expected to reinforce the message that the only road to dealing with Pyongyang lies through the Chinese capital. The future of the Nuclear Nonproliferation Treaty is at stake, following North Korea's unilateral withdrawal last year. And there are very real fears that the rogue regime in Pyongyang might sell fissile material to other rogue states or terrorist groups.

But there is a crucial difference from Iraq that explains why, instead of invading, Washington will be sitting down for another round of six-party talks -- the other participants are China, Russia, Japan and the two Koreas -- on Feb. 25.

America was able to liberate Iraq largely on the basis of its own resources. But, when it comes to Pyongyang, not only are the likely casualties of any military action far higher. In addition to that consideration, even the most unilateralist-minded U.S. administration would be unable to ignore China's interests on the Korean peninsula. China is Pyongyang's neighbor, has a permanent seat on the United Nations Security Council, and possesses its own nuclear weapons.

Moreover, these days South Korea seems more an ally of China than America. South Korea is ever ready to bribe and appease the North, out of a mixture of naivete and fear -- fear of the costs of absorbing the North, and fear of its nuclear and other weapons. Kim Jong Il, by cultivating an image of irrationality, has succeeded in engendering great fear among his neighbors. This is, after all, a regime with a long history of state-sponsored terrorism. So others are willing to believe that the Dear Leader might indeed use nuclear weapons, even at the risk of self-destruction. That fear even extends to some quarters in China, his key supporter and only ally.

So Washington is seeking to convince China that North Korea is damaging its own interests and that it would be far better for Beijing to act to rein in Pyongyang than risk leaving it to Washington to do so. But China's internal disunity on this issue remains a crucial obstacle. Those who think Kim is the devil they know are still winning the argument in Beijing.

The Peoples' Liberation Army has proliferated nuclear and missile technology to Pyongyang in order to make money, and to build up North Korea as a strategic distraction for the United States. Moreover, it's now clear that someone in China abetted Pakistan's proliferation activities. That's because it would have been impossible for the transport aircraft involved in the nuclear technology-for-missiles exchange to fly from Pakistan to North Korea without refueling in China on route.

But as Chinese scholar James Yang has pointed out in an article on this page ("China Must Dump North Korea," April 9, 2003), China stands to lose more than any other country if it fails to rein in North Korea. Beijing has been unable to control Kim -- or prevent him from acting in ways that injure China's own interests, especially in relation to Tokyo. In particular, Beijing cannot ignore the fact that, because of Japan's growing perception of a North Korean threat, it is no longer taboo in Tokyo to talk about nuclear weapons.

Japan is also strengthening its alliance with America, and has agreed to participate with the United States in missile defense. China cannot be thrilled to see members of Japan's Self Defense Force in Iraq, even in a non-combat role. Japan is also acquiring military capabilities that might one day be used against China, or in defense of Taiwan. Even now, Japan's navy is far more powerful than China's.

For China, there are other costs involved in continuing to prop up Pyongyang. As China becomes enmeshed in global capitalism, it sees that international norms and institutions can serve its interests. For example, China is now the world's second-largest importer of oil after America, and so has a growing stake in stability in the Middle East. Thus North Korea's proliferation activities there, like those of the PLA, undermine China's wider goals.

When Deng Xiaoping was China's paramount leader, he was willing to take exceptional risks when disobedient Communists in a neighboring country threatened China's interests. In early 1979, China invaded northern Vietnam. Deng's purpose was not to capture Hanoi, but to teach its Communist rulers a lesson -- that Beijing would not sit by while Vietnam invaded Cambodia (China's ally) with Soviet backing. But it was a high-risk strategy, which led to huge Chinese casualties.

So it's hard to imagine that Deng, if he'd still been around today, would have permitted a pudgy playboy like Kim to engender fear in Beijing, and threaten China's national interests through his nuclear adventurism. But the problem is that no one in power in Beijing today has nearly as much as authority as Deng used to command. Former leader Jiang Zemin is still chairman of the Central Military Commission, and has appointed most of the senior generals. But Mr. Jiang is not a military veteran, and lacks Deng's stature. Meanwhile, China new leaders, President Hu Jintao and Premier Wen Jiabao, are still struggling to complete the succession.

Thus the Dear Leader benefits from China's disunity. But that need not stop next week's six-party talks from playing into the hands of those in China who argue that Kim has become a growing liability. Rightly, America will insist that any deal with North Korea must be verifiable, complete and irreversible. But all that Pyongyang is likely to offer is a nuclear "freeze" -- that is, mere promises of better behavior, provided that suitable bribes and security guarantees are attached. That's a movie which we've seen before, and will rightly be rejected by the Bush administration.

Of course, China can be expected to back North Korea, at least to the extent of insisting that Washington make more concessions. But with luck, North Korea will engage in the same kind of tantrums that marked the first round of talks in Beijing last spring, and so further embarrass and anger its hosts. And that might help convince China that it is finally time to take North Korea's flagrant refusal to adhere to the NPT to the United Nations Security Council.

Behind the scenes, America should urge China to take more drastic action. The Chinese, as a consequence of having saved the North Korean regime from defeat through their extensive military assistance during the Korean War -- for which they got little thanks from Pyongyang -- presumably retain assets in its military. Of course, a coup attempt might not work, at least the first time around. But even a failed putsch might persuade other key members of North Korea's ruling elite that the time was finally up for the Dear Leader.

Ms. Lim is professor of international politics at Nanzan University in Nagoya, Japan and the author of "The Geopolitics of East Asia" (Curzon Press, 2003).

Updated February 18, 2004

An arc of missile shield is what USA is planning and encouraging Bharat to fall in line.

Bharat should demand a price for participation in the shield: the declaration of China's occupation of Tibet as illegal and restoration of Manasarovar as the cultural capital of Bharat in an independent Tibet.


Japan Support of Missile Shield Could Tilt Asia Power Balance

Published: April 3, 2004

OKYO, April 2 — As the United States races to erect a ballistic missile defense system by the end of the year, it is quietly enlisting Japan and other allies in Asia to take part in the network, which could reshape the balance of power in the region.

Last week, a few days after the United States Navy announced that it would deploy a destroyer in September in the Sea of Japan as a first step in forming a system capable of intercepting missiles, Japan's Parliament approved spending $1 billion this year to start work on a shield that would be in place by 2007.

On Wednesday, the Pentagon said it would sell Taiwan $1.78 billion in radar equipment to increase the nation's ability to detect ballistic missiles. Australia decided in December to join the United States-sponsored system, and American officials are holding talks with India.

But the network will eventually require the sharing of critical information and coordination among its members, which could split Asian nations into two camps: those inside and those outside the system. Those inside the system say the shield will be a defense against the missile buildup by nations like China and North Korea; those outside say it will destabilize the region and start an arms race.

China, already displeased with Japan's decision, said Thursday that the radar sale to Taiwan sent the "wrong message," and it reiterated its opposition to America's selling "advanced weapons" there. The United States has vowed to protect Taiwan against an attack by China, which has 500 missiles pointed at the island.

North Korea said Thursday that the Navy's deployment of the destroyer was preparation for war and part of its "attempt to dominate the Asia-Pacific region." Indonesia, which does not have ballistic missiles, has said Australia's decision could also ignite an arms race.

For Washington, getting its allies aboard makes it easier politically and financially to push ahead with a system that critics have described as too costly and unproven. President Bush, who withdrew from the 1972 Antiballistic Missile Treaty, made a missile defense shield a campaign promise in 2000.

In Europe, Britain has signed on, but interest there has been generally tepid compared with the reception in Asia, where the missile buildup in China and North Korea, and the proliferation of nuclear technology from Pakistan, are driving the rise in the region's military spending.

Japan's role in missile defense is particularly significant because deployment could force it to alter long-held pacifist practices and re-examine its Constitution.

The immediate threat for Japan comes from North Korea, which launched a missile in 1998 that flew over Japan before it fell into the sea. North Korea has ballistic missiles that could easily strike Japan. China's successful launching of a manned space capsule last year and the increasingly frequent movement of Chinese naval vessels near Japan's territorial waters have also unnerved the Japanese.

Japan has stressed the North Korean threat, trying to persuade a skeptical China that the shield would be purely defensive.

Howard Baker, the United States ambassador to Japan, acknowledged that a shield would rob missile-armed nations of offensive power and could encourage the development of shield-piercing missiles, but he said it would not destabilize Asia.

"Missile defense is a unique military concept," Mr. Baker told reporters here on Friday. "It is inherently incapable of offensive operation. It is purely defensive. And therefore I don't think anybody should be concerned about it."

Japan would spend $10 billion in this decade to develop a two-layer shield. In the 10 minutes or so that it would take a ballistic missile fired from North Korea to reach Japan, one of Japan's advanced destroyers with the Aegis weapons system would try to intercept it by firing ship-to-air missiles. If that failed, Patriot missiles based around key cities would have a second chance to knock down the enemy missile.

To build the shield, Japan plans to modify its four Aegis destroyers by adding the interceptor, the Standard Missile-3, and by purchasing 16 new versions of the Patriot missiles. To track incoming missiles, Japan would rely on intelligence from United States satellites, but it also plans to construct a land-based radar network and a command and control system.

In the last two years, the United States has conducted five tests of its Aegis-based Standard Missile-3, completing four successfully. The United States and Japan are expected shortly to conduct joint tests of an upgraded version of the missile that would incorporate four components developed together: an infrared seeker, kinetic warhead, rocket motor and nose cone.

The first joint test is to take place in late 2005, followed by another in early 2006, said Lt. Cmdr. Alvin Plexico of the Navy, a spokesman for the Defense Department.

The production of these components — and the likelihood that they will eventually be sold to other nations joining the network — could force Japan to abandon one of the cherished tenets of its postwar pacifism: a ban on arms exports. Although Japan has long had one of the world's largest military budgets, its arms industry has been barred from exporting since 1967.

Shigeru Ishiba, Japan's defense minister, who has publicly floated the idea of rescinding the ban, said Japan would not become a "merchant of death, selling weapons all over the world to make huge profits." But he added that there might be components that could be produced only in Japan.

"We don't know how things will turn out yet," he said.

Another necessary change might be a redefinition of Japan's concept of collective self-defense. Japan has maintained that it has that right, but chooses not to exercise it because it is not allowed under its Constitution, which was imposed by the United States during the postwar occupation.

The government has argued that intercepting a missile aimed at Japan amounts to a pure act of self-defense and emphasizes that the shield will be a Japanese one. But others point out that Japan will be part of a system linking the continental United States and other friendly nations.

Complicated situations can also arise: How does Japan react if United States naval vessels in international waters are attacked, or if another country in the network is attacked?

Hideaki Kaneda, director of the Okazaki Institute here and a former admiral in the Self-Defense Force, said adopting missile defense, like sending troops to Iraq, was evidence of Japan's fundamental rethinking of its security and its desire to become a more active partner in the security alliance with the United States.

"Japan will protect U.S. troops stationed in Japanese territory" against a missile attack, Mr. Kaneda said. "This would make the nature of the Japan-U.S. alliance more mutually responsible."

The United States had been urging Japan to adopt missile defense at least since 2002, but Tokyo had hesitated until late last year, mainly out of fear of upsetting China, said Robyn Lim, a professor of international relations at Nanzan University in Nagoya, Japan.

"The United States's message was that it could build missile defense with or without Japan," Ms. Lim said.

In an Asia still suspicious of Japan, missile defense is the safest way to accommodate Japan's new security interests, Ms. Lim said, especially when talk of acquiring nuclear weapons is no longer the taboo it was only a few years ago.

"The Japanese are going to have to tackle the nuclear issue and the threat from North Korea one way or another," she said. "For China and the rest of Asia, it's better for Japan to do this within the framework of the U.S.-Japan security alliance."

In a meeting with Mr. Ishiba in Beijing in September, China's defense minister, Cao Gang Chuan, warned that Japan's adoption of an antimissile system would disrupt the global strategic balance and set off an arms race.

An effective shield would challenge China's military power by curbing the effectiveness of its missiles, which can now strike Taiwan or American forces stationed in Okinawa and elsewhere.

Russia said in February that it was developing a so-called hypersonic missile technology capable of piercing the United States' system.

But Mr. Ishiba said he did not believe that a shield would encourage other countries to develop missiles that would defeat the system. "If you launch a missile and it gets shot down," he said, "you give up missile production."

Hindi-Chini bhai-bhai
-Jyoti Malhotra in INDIAN EXPRESS, April 7, 2004

India is likely to vote in favour of China and against a US-sponsored resolution criticising the human rights situation during the ongoing UN Human Rights Conference that is taking place in Geneva. <b>While New Delhi’s decision to support Beijing is in line with its politically correct beliefs that the West has no business to interfere in another country’s internal affairs (read, Kashmir),</b> fact is that India’s support is crucial at a time when China is under the scanner especially for human rights violations in Tibet and Xinjiang (‘‘strike hard’’ policies have wilfully executed people daring to rebel against the State).

New Delhi’s arguments that the US is sponsoring an anti-Chinese resolution because it’s an election year at home has merit. Fact also is that the US, backed by the UK and other Western nations, is sponsoring such a resolution after a gap of a few years. India’s support, meanwhile, underlines the political decision to mend fences with China. That is the underlying philosophy of the boundary talks between the two Special Representatives (Brajesh Mishra and his counterpart, Dai Bingguo), of which two rounds have been concluded. Whatever the result of the elections, and whether or not he remains Principal Secretary to the PM, as the designated SR, sources said, Mishra will continue to lead India in the boundary negotiations with China.
<b>China for anti-terror front with India, Pak</b>

23 April 2004: China has offered to work separately with India and Pakistan to contain Uyghur terrorism in its Xinjiang province and the Himalayan region, but while both countries accept of such cooperation in principle, the nitty-gritties remain to be worked out.

The Chinese defence minister, Cao Gangchuan, visited India last month, and suggested setting up reciprocal anti-terrorist monitoring stations in Indian Ladakh and Tibet, but because of the impending elections, and the surprise nature of the request, no progress was made.

Cao also suggested intelligence-sharing on terrorism and the exchange of intelligence operatives, but again, India made no commitment, except to say it was committed with China to fight terror.

On his visit to China earlier this month, the Chinese side also sought joint anti-terrorist operations with Pakistan’s foreign minister, Khurshid Mahmood Kasuri, offering the same terms as previously offered to India, but Pakistan has taken no decision so far.

<b>In Xinjiang and in other Uyghur-dominated provinces, there have been nearly two-hundred bomb blasts and terrorist attacks in the last six months, and China fears that the terrorist violence is radiating to its so-far peaceful Western region</b>.

With the United States entrenched in Afghanistan, Pakistan and Central Asia, China apprehends American intervention under cover of resolving the Uyghur crisis, which diplomats cite as a reason for China to approach India and Pakistan for joint action against terrorism.
<b>China seeks Maldives base again</b>
24 April 2004: Confronted by some Western powers, Maldives has admitted to secretly receiving a Chinese Peoples’ Liberation Army-Navy team early last month, but its explanation that the team carried out preliminary oceanic and environmental studies is not being believed.

Nearly three years ago, we scooped China’s plans to establish a submarine base in Marao (Special Report, “China: Base strategy ,” 27 July 2001), one of the largest of the 1192 coral islands grouped into atolls that comprise Maldives, but premature publicity scuttled the project, and diplomats say the Peoples’ Republic may be at it again.

The PLA-N team met Maldives’ prime minister and defence minister, apparently surveyed the ocean within a radius of 180 kilometers from Male, the capital, and enquired about setting up observatories and disaster-management centres, because the island nation may be submerged by 2040, since global warming is pushing up ocean and sea levels.

Marao will be one of the few islands to survive submergence, and in any case, submerged coral islands make better submarine pens.

When Western countries first confronted Maldives with the PLA-N visit, the island officials mumbled about joint naval exercises, but later gave environmental cover to it, but diplomats concede that China would prefer to start uncontroversially and then unveil its full plans.

<b>China’s big worry is the extended lease of the US’s Diego Garcia base, and American moves to deploy submarines in the Malacca Strait despite Malaysia and Indonesia’s refusal to give permission in February, and the certain presence of at least two US submarines in the Taiwan Strait to defend Taiwan against China</b>.

“No one is certain of Chinese intentions this time,” a diplomat said. “It could be a base the Chinese want, because they want to break out of the growing American stranglehold.”

Sources could not confirm if the Indian government knows about the visit of the PLA-N team to Maldives.
<b>Euphoria, Meltdown and China's Economy</b>
Apr 30, 2004


New lending policies in China are triggering a fundamental rethinking of the stability of the Chinese economy. This time no amount of damage control can hide the fact that the myth of the Chinese economic miracle is finally -- and perhaps fatally -- breaking apart.


<b>Significant uncertainty erupted in Chinese banking circles this week as reports circulated globally that the China Banking Regulatory Commission had suspended all lending for three days.</b> This would effectively create a lending moratorium for well over a week due to the upcoming May Day celebration. The story, which appeared in the Wall Street Journal and other media, was quickly denied. However, Western media, including Agence France-Presse, are citing specific examples of Chinese banking officials who claim to have seen the order. Officials at the China Merchants Bank said they received the order from the CBRC -- and that it was issued by the Chinese Cabinet.

The issuance of the order -- which obviously could not be kept secret -- indicates one of two things. One, the Chinese government, alarmed at what it sees happening in the banking system, decided the situation was out of control and sought to take control with a moratorium that would buy some time for planning. When the international reaction started to roll in, they became alarmed at a collapse of global confidence in China's economy and pulled back. This would indicate a degree of panic. A second explanation is that Beijing, concerned with the banking system, issued an order it had no intention of enforcing -- in order to fire a shot across the bow of the banking system and generate internal discipline.

Either explanation leads to the same conclusion, as Stratfor stated in its annual and quarterly forecasts: There are extremely serious problems with China's economy in general -- and with its banking system in particular. The only issue on the table is whether the behavior of China's authorities reveals deep concern or outright panic. That is an interesting question -- and not a trivial one -- but it does not cut to the heart of the problem, which is that China, contrary to popular perception or even its extremely high economic growth rate, is in serious trouble and is desperately searching for a soft landing -- a landing that might not be available.

To understand China's problems, it is necessary to look at the structure -- and failures -- of other Asian economies. We have already seen two major systemic crackups in Asia during this generation. Japan went from being an economic superpower that was predicted to dominate the global economy in the 21st century to an economic cripple during the early 1990s. East and Southeast Asia, excluding China, similarly passed from economic miracles to economic catastrophes in 1997. In both cases, the striking characteristic was the speed at which overblown Western expectations turned into disappointment. It is our view that China, which got started later than other Asian economies, is on course to be the third Asian meltdown in this generation. The euphoria about China until very recently -- and China's assiduous attempts to stoke expectations -- tracks with what happened in the rest of Asia.

The core problem in Asia -- a problem that the Chinese government is trying to address belatedly -- is that its banking systems do not allocate capital based on market forces. Loan decisions are made out of political and social considerations, and real interest rates vary depending on these relationships. Long-term business relationships in Asia receive favorable treatment from banks regardless of the actual business case to be made for a loan.

Of equal importance, these are debt rather than equity driven economies. The major source of financing does not come from sale of shares in businesses, but from direct loans. There are two reasons for this. The legal structure of Asian corporations gives limited rights and protections to shareholders, who do not collectively control corporate boards. Therefore, maximizing shareholder value is not a driving consideration. It also means that a core measure of economic performance -- the rate of return on capital -- is not a critical variable.

Cash flow is critical. The primary financial relationship of Asian -- and Chinese -- businesses is with banks. The primary interest of bankers, who have tremendous influence on boards, is the repayment of loans and interest. Cash flow is therefore critical to the system, while return on investment -- particularly in the long term -- is not a significant factor. Investment -- and a return on investment -- is more significant in China than in other Asian locations, but the general rule still holds.

The Way It Works, or Doesn't

In Asia, there are two interconnected processes that must take place. First, there has to be a forced savings system that channels money into the banking system at low consumer rates to generate cash for loans. This obviously limits domestic consumption; if you are saving for your retirement because of nonexistent or insufficient retirement plans, you are not in a position to buy a great deal. This leads to a second, linked process: export-oriented economies. If you must make bank payments, and your own market has constrained demand due to high savings rates, your only option is to sell overseas.

In forcing exports, the focus is on cash flow rather than profit margins. This means goods are sold near cost -- and in extreme cases below cost -- in order to cover debt service. From the importing country's point of view, this can have a devastating effect because domestic companies driven by return on capital cannot compete in the short run with Asian imports that are indifferent to profit margins. Entire industrial sectors are taken out. At the same time, economic growth in the exporting country -- measured simply in terms of production and sales -- surges. But underneath these apparently astounding economic achievements, the Asian economy is actually hollowing itself out.

The core problem is that, over time, the allocation of loans based on non-market consideration, means that the economy, lacking market disciplines, behaves in irrational ways. Most important, the disciplines of market economies -- from foreclosures to recessions -- don't happen. Essentially unhealthy businesses continue to grow due to the infusion of debt. The infusion of debt has a number of positive results. It maintains social stability, keeps the political system functioning and it allows banks to avoid non-performing loans. It also has a single devastating effect -- it creates an economy that is kept alive by pyramiding loans that undergird an increasingly dysfunctional system.

Non-performing loans are avoided in three ways. First, there is the continual restructuring of debt and infusion of more money, designed to keep bad loans off the books and maintain confidence in the banks and the banking system. Second, companies implement aggressive export programs to generate cash flow. Finally, programs are put into place to induce foreign investors to put money into joint ventures, whose boards are controlled by Asian companies. This prevents foreign investors from really looking at the books of the Asian parent companies, but allows the boards to make decisions that transfer money from the joint venture into the parent company.

In order for this latter process to work, the Asian countries create a sense of euphoria for foreign investors. Japan in 1990, East and Southeast Asia in 1995-1996 and China in 2003 all created nearly hysterical environments in which foreign investors felt they could not resist participating in various placements and industrial joint ventures. Western investment banks play a critical role in this process by overestimating Asian potential, while collecting fees on placements.

This hollows out the banks. In Japan and Asia, it was the large financial institutions that first felt their foundations collapsing under them. At a certain point, the cash flow requirements outstrip debt service and export demand, and foreign direct investment can no longer make up for them. Non-performing loans begin to accumulate. The banks wind up with more hungry mouths than they can feed, and they scramble to maintain the system.

The system erodes slowly but the perception of systemic failure comes suddenly -- making the management of the flow of financial information a critical issue. The banks, working with the government, hold things together until they can no longer do so. A crisis builds around the public realization that major financial institutions are failing, vulnerable to failure or can survive only through heroic measures. A period of sharp, intense crisis takes place, which does not solve any fundamental problems. A long period of malaise follows, as some recover and others fail.

China Tries to Cope

The Chinese government is trying to prevent the crisis from breaking out into the open, essentially by stopping the intensifying debt production process that banks are engaged in. Of course, if the banks stop making loans, the entire system can hit a brick wall. You can evade the wall if foreign direct investment increases, driven by confidence that the Chinese government is taking steps to control the situation. You can evade the wall if you can increase exports. But if exports are at the maximum -- simply because you can't produce more goods and foreign markets can't absorb them -- and global finance is thrown into a panic by suspending loans, then the entire system can crack.

The Chinese government knows it has a major crisis on its hands. Its loan moratorium was designed to buy a week or so to try to sort through this problem. Somehow, it fantasized that it could keep the moratorium quiet. When the Wall Street Journal announced it, the Chinese realized that a global crisis of confidence was in the offing, so they officially suspended the moratorium. Saying "never mind" is an interesting strategy, but essentially Beijing has let the cat out of the bag. The banking industry is out of control, and the government is not sure how to get it back under control without the very public airing of some very dirty laundry.

In reality, the enormity of the problem is dawning on everyone. This is not a technical problem of managing a normal business cycle. This is a banking system nearing meltdown for which the government would like to find a technical solution that would allow the game to go on. Beijing had hoped a $45 billion bailout ahead of a series of initial public offerings (IPOs) of shares in two of its leading commercial banks would help keep the system afloat. IPOs for banks whose policies are so troubling that the government forces them to suspend lending are not likely to be a wildly successful. The system is crumbling.

The problem is that, as with the rest of Asia before it, the game can't go on for China. On the other hand, the Chinese government can't possibly take the draconian steps that would be needed to begin the process of healing. There would be political chaos.

Therefore, the Chinese government has signaled what it would do with political chaos by blocking elections in Hong Kong. Therefore, we have seen a major outflow of money from China by individuals and institutions that know the jig is up. Therefore, China's leaders have been signaling for the past week that there is a major crisis. They are trying to manage their way through it. But even if they do, the best they can hope for is Japanese-style malaise -- and China's political and social systems are not Japan's. Malaise is not a viable option.

It is interesting to note that the Japanese and Asian meltdowns did not affect the rest of the world as one might predict. Certainly, investments there were devastated, and business plans based on 10 percent growth a year were shattered. But the United States in particular benefited from the meltdown, as panicky money fled its way. One could argue that the impetus for both the early 1990s surge and the late 1990s surge came from money fleeing Asia and moving into the United States.

The sky is not falling for the global economy. It might be falling for China. Without a convertible currency -- this is why Beijing will not float and trade the Yuan -- China has some tools to handle the problem that Thailand or Indonesia did not. <b>In the end, the economic game is ending and the political one is beginning. As China -- slowly or quickly -- decays economically, the political consequences will be the most important.</b> <b>Even if China avoids complete meltdown, avoiding malaise will be much, much harder. Stratfor thought all this would wait until 2005. Right now, the Chinese do not look so lucky. </b> <!--emo&Big Grin--><img src='style_emoticons/<#EMO_DIR#>/biggrin.gif' border='0' style='vertical-align:middle' alt='biggrin.gif' /><!--endemo-->
<b>Recent Chinese map shows Sikkim as part of India</b>
Anil K Joseph (PTI)
Beijing, May 6

<b>In a significant move that could go a long way in improving relations, China has for the first time officially shown Sikkim as part of India</b>.

The world map in the just-published World Affairs Year Book - 2003/2004 has stopped showing Sikkim as a separate country in Asia and does not mention Sikkim separately in its index of countries.

<b>The official Chinese publication last year had shown Sikkim as a separate country in its map and had mentioned it among 'independent' nations</b>.

<b>The move is significant since it involves recognition of the present Sikkim-China border, which is part of the 'Mcmahon line,' which Beijing has never accepted as constituting the boundary between India and China</b>.

The formal change of Chinese maps will also seal the commitment implicit in the trade agreement signed during Prime Minister Atal Bihari Vajpayee's historic visit to China in June last year by which the two countries had agreed that border trade would be conducted through Chhangu in Sikkim.

The latest Chinese move to formally accept Sikkim's accession to India in 1975 is the second such step taken by China since Vajpayee's meeting with his Chinese counterpart, Wen Jiabao during which both leaders agreed to find an early solution to pending problems in bilateral ties.
Where is the post where a chicom had a long list of comparision.

Can somebody post it again.
<!--QuoteBegin-acharya+May 8 2004, 12:58 AM-->QUOTE(acharya @ May 8 2004, 12:58 AM)<!--QuoteEBegin--> Where is the post where a chicom had a long list of comparision.

Can somebody post it again. <!--QuoteEnd--><!--QuoteEEnd-->
some indians fear to face the fact ,so they delete it..i could post it again ,but maybe those craven will remove it .i am not commie
<!--QuoteBegin-acharya+May 8 2004, 12:58 AM-->QUOTE(acharya @ May 8 2004, 12:58 AM)<!--QuoteEBegin--> Where is the post where a chicom had a long list of comparision.

Can somebody post it again. <!--QuoteEnd--><!--QuoteEEnd-->
acharya: Compare China with what? Can anyone beat their Human Rights violation record? The genocide in Tibet by Chink-coms dwarfs Rawanda and rest of African nations combined - think anyone can beat it? Their women have to flee to give testimony in US congress about their state sponsored draconian birth control methods. Citizens are mowed down by red army tanks. Handful few who talk about freedom or democracy are doing so from foreign nations. If anyone other nation had slave gulag labor they too would have 1000% gains. Chinkcom with their huge population might have more cell phones and computers than say Bangladesh or Timbucktoo - why the f*(k do we care. Even those handful of web surfers in Sudan are able to surf more freely without the big brother looking over their shoulders. They hide health issues in their SARstan and have a cheek to point at fingers at others.

We'd like to take the drones like LEE (yep, he's to shout his name OUT LOUD) seriously, but to do so would be an affront to his intelligence. These guys can lie from both sides of their mouth at the same time, and if they ever caught themselves telling the truth, they'd lie just to keep the hand in and peddle it as "facts". So, next time anyone comes around taking about Chinese civilization - tell him it's a very good idea. <!--emo&:beer--><img src='style_emoticons/<#EMO_DIR#>/cheers.gif' border='0' style='vertical-align:middle' alt='cheers.gif' /><!--endemo-->
<b>Can Chinese industry be made safe? —John Fabian Witt</b>

Lawsuits are apparently increasingly common, but they are notoriously cumbersome, and judges are not independent from factory bosses. Compensation awards to injured workers and their families are pitifully low and fail to give employers incentives to make their workplaces safe

After a massive gas well explosion killed 243 people in southwest China last December, China’s State Council and National People’s Congress have announced new rules for industrial safety. The authorities’ response follows a now-familiar pattern: high-profile pronouncements in the wake of workplace disaster give way to neglect of basic safety standards. But if Western experience is any guide, ad hoc responses to high rates of work accidents won’t reduce the risks to Chinese workers. Only the development of basic legal institutions will help make Chinese workplaces safer.

<b>China and other developing Asian economies are experiencing an industrial accident crisis of world-historical proportions. Official sources report 14,675 industrial-accident deaths in China in 2003, but statistics on workplace accidents are notoriously unreliable, and some observers suggest that the number may be closer to 120,000.

China’s coalmines are among the most dangerous places to work in the world. Chinese garment factories have repeatedly experienced disasters on a par with the infamous Triangle Shirtwaist fire in New York City a century ago, which killed 146 workers, all young women.

Conditions may well get worse before they get better. Even though China instituted new initiatives in industrial safety at the beginning of 2003, official estimates indicate that industrial accident deaths increased by almost 10 percent last year.</b>

Yet as the example of the Triangle fire suggests, the China’s experience is not unprecedented. Until the recent Asian accident crisis, the poorest workplace safety record in world history belonged to the United States in the fifty years following the American Civil War.

Coalmines in Pennsylvania in the 1860s — where 6 percent of the workers were killed each year, 6 percent crippled, and another 6 percent temporarily disabled — looked very much like the mines now operating in China’s Shaanxi Province. Industry-wide, one American worker in fifty at the turn of the last century was killed or seriously disabled each year in work-related accidents. Accidents were the leading cause of death among workers in dozens of hazardous industries.

Of course, American industry is still plagued by serious safety problems. But seen from a historical perspective, there has been a striking decline in work-related injuries and deaths in the US. There were 30,000 annual work-related fatalities a century ago; today, the annual average is around 5,000, even as the population has tripled.

What explains this huge improvement in occupational safety in the US? Increased union membership in the mid-twentieth century clearly helped, as workers bargained and lobbied for improved working conditions. In recent decades, some of the most dangerous work has been shipped overseas (ironically, much of it to China). And as Americans have grown wealthier, they have been willing to spend more on safety.

But the deeper historical reasons for improved workplace safety lie in an array of legal institutions developed by workers, employers, lawyers, and lawmakers at the end of the 19th and beginning of the 20th centuries. American workers’ organizations, for example, developed insurance benefits for their members and sought to exercise collective control to improve workplace safety. American lawyers developed modern accident law that created remedies against negligent employers.

Most importantly, drawing on reforms first implemented in Germany, England, and France, workers’ compensation statutes provided compensation for injured workers and created powerful incentives for employers to reduce accident tolls. In the 1910s, American workplace injuries began to fall in virtually every industry, except coal mining (where injury rates remained high for several decades).

Each of these innovations helped create an institutional infrastructure capable of dealing with the problem of work accidents — and, indeed, with the wider social problems of disability, sickness, old age, and unemployment. Why? Because workplace safety and industrial accident compensation turned out to be critical early tests of western legal systems’ administrative capacity to deal with the systemic problems of industrial free-market societies.

Of course, what worked for the US may not work for China. There are many different ways that legal systems can respond to occupational safety problems. The US, for example, never developed a powerful body of factory inspectors capable of providing effective enforcement of public safety standards. Other western states, such as Germany, have successfully relied on centralized regulation and social insurance systems ever since Bismarck reformed the German law of accidents in the 1880s.

<b>Unfortunately, China is obstructing all available paths to improved workplace safety. National safety standards and inspection regimes reflect the underlying pathologies of the Chinese state, in which lower-ranking officials report only positive information up the bureaucratic food chain. At the same time, limits on workers’ ability to organise independent unions have inhibited grassroots forms of safety monitoring. Even Chinese media have come under fire from officials for uncovering the kinds of workplace hazards that muckraking journalists revealed a century ago in the US.</b>

Lawsuits are apparently increasingly common, but they are notoriously cumbersome, and judges are not independent from factory bosses. Compensation awards to injured workers and their families are pitifully low and fail to give employers incentives to make their workplaces safe.

The lesson of the US and European experiences is that improving workplace safety depends on the development of basic rule-of-law standards in courts, workplaces, and administrative bureaucracies. Edicts and exhortations from the State Council are all well and good. But only effective legal institutions, not Party fiat, will reduce Chinese workers’ risk of death or injury on the job. —DT-PS

<i>John Fabian Witt is an Associate Professor of law at Columbia University and author of ‘The Accidental Republic: Crippled Workingmen, Destitute Widows, and the Remaking of American Law’</i>

Unstable India and vultures are back

<b>China Backtracks on SIKKIM</b>
China ready to work with new Indian government

Anil K Joseph in Beijing | May 18, 2004 18:10 IST

China today said it looked forward to work jointly with the new Indian government to forge a "long-term constructive cooperative partnership" to boost bilateral ties while stressing that the "Sikkim issue" would be resolved "gradually."

"After the establishment of the new Indian administration, China stands ready to work with India to maintain and develop the good momentum of the bilateral ties and to promote constant progress of the long-term constructive cooperative partnership between the two countries," Foreign Ministry spokesman Liu Jianchao told reporters here.

Commenting on the outcome of the general elections in India, Liu said China has taken note that the Congress party has emerged as the biggest party and the Chinese government will send congratulatory message to the new government once it is formed.

Describing India as a "very important neighbour," he stressed that Sino-India relationship has been improved and developed in an all-round way. "It is the common wish of both people to develop the bilateral relationship," he said.

Asked whether China and India have settled the Sikkim issue, Liu sidestepped the question saying it was an "issue" left over from history, and "we hope that with the constant improvement of ties between China and India, the question will be solved gradually."

<b>He did not refer to Sikkim being removed as an "independent country" in China's revised official world map</b>.

On the Indian election's impact on Indo-Pak peace process, the spokesman hoped that the two sides would continue the momentum in talks and live peacefully. Noting that the relations between India and Pakistan have improved in recent times, he said, "we hope the momentum in the improvement of bilateral ties can be maintained and the two countries can live with each other in peace and contribute to peaceful and stable South Asia."

India and Pakistan were both important countries in South Asia, and the development of bilateral ties between New Delhi and Islamabad would impact on the stability and peace in South Asia.

He declined to compare China's one-party dominated "democratic" political system with that of India's multi-party democracy, saying Beijing "respected" the choice made by Indian people in their path of nation building.

"I don't want to make any comment or comparison between the (political) systems of both countries," he told a western correspondent who asked whether China or India could boast of having the world's largest democracy.

"The political systems and the development path of India is a choice made by its own people. We respect their choice which was made in accordance with their own situation," he said, while stressing that China too had "democracy."

"The political system of China is democratic. China is the largest developing country. India is one of the largest developing countries in the world," he said. The people of various countries can choose according to their path to democracy including the political systems.

"China stands ready for dialogue and exchanges with relevant countries in promoting democracy. We are trying to join hands with other countries to promote the livelihood of the Chinese people," he said.

Since the People's Republic of China was founded in 1949, the Communist Party of China (CPC) has ruled the world's most populous nation. Apart from the CPC, there are eight non-Communist parties in China's mainland, which cooperate closely with the ruling party.

<b>China to ban foreign movies</b> [Lets see Indian commie will ape them]
Chinese are very good at making an issue when there is none. There is no Sikkim issue, and whether they include it in their maps or not is irrelevant.
Ongress needs a China hand Commies will provide hidden hand
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->The BJP, in its previous incarnation as the Jan Sangh, could not escape some share of the responsibility for the 1962 debacle. The Jan Sangh, then in the Opposition and widely perceived as pro-Washington and anti-Beijing, pushed Jawaharlal Nehru, the then Congress prime minister, into a situation which led to the war.<!--QuoteEnd--><!--QuoteEEnd-->
First time, I have heard this logic, Even Nechiville failed to mention this skewed reasoning. He is making complete U-turn from what he said during his number of tours in US.
<!--QuoteBegin-kautilya+May 20 2004, 01:43 AM-->QUOTE(kautilya @ May 20 2004, 01:43 AM)<!--QuoteEBegin--> Mudy,
   Chinese are very good at making an issue when there is none. There is no Sikkim issue, and whether they include it in their maps or not is irrelevant. <!--QuoteEnd--><!--QuoteEEnd-->
That's because we are attaching lots of importance to their recognition !

Who cares if the Chinese recognises Sikkim as a part of India or not. As long as India controls it and governs it, we should ignore the Chinese.

Also, If possible India should start projecting Tibet as an independent nation.
Counterfeiting cars in China
Months before General Motors began selling its $7,500 Chevrolet Spark in China in December, a $6,000 knockoff version, the Chery QQ, with the same grinning front end but missing some subtle details (like an airbag), was cruising Chinese streets. Even more galling: The manufacturer of the pirated version was partially owned by GM's Chinese business partner. <!--emo&:lol:--><img src='style_emoticons/<#EMO_DIR#>/laugh.gif' border='0' style='vertical-align:middle' alt='laugh.gif' /><!--endemo-->
<b>Re-register with a proper user-handle. Till then bye.
Uighurs of China's restive Xinjiang province: "China is the cruellest country in the world." and if we go there, death is waiting for us.
A McKinsey perspective on Indo China relations

India and China: The Need for Radical Strategic Realignment

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