Monday, 6 December 2010
WIKILEAKS: WEST WANT TO CRUSH CHINA BY WAR, BUT CANNOT DO IT DUE TO CHINA'S STRENGTH; WEST ARE NO LONGER WORLD'S OVERLORDS
Thursday, 16 September 2010
Wednesday, 25 August 2010
Chomsky: "What is challenging the US
is not China’s development, but its independence."
Global Voices Online
On 13 August, Noam Chomsky delivered a speech at the Peking University in Beijing. Chomsky, one of the leading public intellectuals of our age, is famous for his political activism and contributions to linguistic and philosophy. The talk, titled Contours of World Order: Continuities and Changes, was mostly about two dominant threats facing humanity: nuclear wars and environmental degradation.
While Chomsky has re-emphasized his criticisms on the United States, he has also expressed his opinions on China. In Chomsky’s view, emerging countries like China and India still have a long way to go to challenge the America. Of particular concern is the environmental cost of China’s development model, and the many internal and social problems that China has to tackle. This week, the Southern Metropolitan Daily publishes an interview with Chomsky. An excerpt of the interview is translated below.
SMD: Most Chinese have accepted globalization. In the past three decades, especially after China joined the World Trade Organization (WTO), many Chinese have benefited tremendously. But it seems that you see globalization in poor lights.
Chomsky: China’s economic achievement has little to do with globalization. It is related to trade and export. China has gradually become an export-oriented country. No one, myself included, is opposed to exports. But this is not globalization. In fact, China has become a factory in the Northeast Asian production system. If you look at the whole region, you will find it very dynamic. China’s export volume is enormous. But there is something we have overlooked. China’s export relies heavily on the exports of Japan, Korea and the US. These countries provide China with high-tech components and technologies. China is just doing the assembly, and labelling the final products as ‘Made in China.’
China has developed rapidly by following wise policies. But while millions of people were lifted out of poverty, costs such as environmental degradation are high. They are merely transferred to the next generation. Economists will not worry about them, but these are costs that someone needs to pay for ultimately. It may be your children or grandchildren. These have nothing to do with globalization and the WTO.
SMD: Do you think the rise of China will change the world order? Will China play the role that the US is playing now?
Chomsky: I don’t think so; neither do I hope so. Do you really hope to see a China with 800 overseas military bases, invading and overthrowing other governments, or committing terrorist acts? This is what the America is doing now. I think this will not, and cannot, happen on China. I do not wish it to happen neither. China is already changing the world. China and India together account for almost half of the world’s population. They are growing and developing. But relatively speaking, their wealth is only a small part of the world. Both countries still have long ways to go and face very serious domestic problems, which I hope will gradually be solved. It is meaningless to compare their global influences with those of rich countries. My hope is that they will exert some positive influences to the world, but this has to be watched carefully.
China should ask itself what role it wishes to take in the world. Fortunately, China is not assuming the role of an aggressor with a large military budget, etc. But China does have a role to play. It is am enormous consumer of resources, and there are pros and cons. For example, Brazil will benefit economically if it exports to China. On the other hand, its economy will also be damaged. For countries with abundant resources like Brazil and Peru, one problem is their reliance on exports of primary resources, which is not a good development model. To change their mode of development, they first need to solve their domestic problems and transform themselves into producers, not just exporting primary products to other producer countries.
SMD: Is the success of China a challenge to Western democracies?
Chomsky: Let’s make a historical comparison. Was the rise of the United States a threat to democratic Britain? The United States was founded on the slaughtering of indigenous population and the slave system. Is this model suitable for other countries? Do you want China to learn from this model? It is true that the US has developed into a democratic country which is strong in many respects, but its democracy is not developed from this model, which any rational person would not want to imitate.
China is developing, but there is no evidence to prove that its internal development is causing a threat to the West. What is challenging the US is not China’s development, but its independence. That is the real challenge.
You can tell from every day’s headlines that the current focus of US foreign policy is Iran. The year 2010 is called ‘The Year of Iran.’ Iran is portrayed as a threat to US foreign policy and the world order. The US has imposed harsh, unilateral sanctions, but China has not followed suit. China has never followed the US lead. Instead, it supports UN sanctions, which are too weak to matter. A few days before I left for China, the US States Department warned China in a very interesting way. It said China has to bear international responsibilities, i.e. follow US orders. This is China’s international responsibilities.
This is standard imperialism, which is that other countries have to act according to our requests. If not, they are irresponsible. I think officials from the Chinese Foreign Ministry must laugh when they hear this. But this is the standard logic of imperialism. In fact, Iran becomes a threat because it does not follow US instructions. China is a bigger threat, as it is a big problem when a major power refuses to obey orders. This is the challenge that the US faces.
Wednesday, 18 August 2010
US anti-China rhetoric at danger level
By Benjamin A Shobert
Asia Time Online
22 June 2010
WASHINGTON - The US-China Congressional Committee (USCC)
this month held its most recent hearing on US-China
relations, specifically on "China’s Past and Future Role in
the World Trade Organization" (WTO). As Commissioner
Patrick Mulloy stated at the opening, "The purpose of
today’s hearing is not to second guess what Congress did 10
years ago. Its purpose is to look at the arguments made in
favor of China’s WTO entry by proponents and to consider
Considering the political environment in Washington, where
recent days have been marked by the most serious
bi-partisan efforts of the past decade to introduce
legislation that would impose new trade barriers on
Chinese-made goods, and increase pressure for
an upward revaluation of the yuan against the US dollar,
Mulloy’s comments are particularly meaningful.
The nature of politics in Washington can lull policymakers
to sleep: rhetoric over China's rise has been slowly
growing increasingly negative as a more specific set of
grievances over the past five years have coalesced. Most
advocates for economic integration with China have grown
used to (and perhaps even weary from) those who seem
fixated on the loss of opportunities related to China's
But voices that were once easy to dismiss are now, in the
middle of an ongoing economic setback that at its best is
labeled a "jobless recovery", are becoming more politically
powerful, and insiders in Washington are beginning to sense
that this time it might actually have significant impact on
the economic relationship between the two countries.
During last week's USCC testimony, Senator Charles Schumer
(Democrat, New York) provided in written testimony a very
specific insight into the grievances of many Americans and,
as a consequence, the powerful politicians who represent
them: "China's policy of large-scale intervention in the
exchange markets and the significant undervaluation of its
currency also subsidize Chinese exports to the United
States and, at the same time, make US exports to China more
expensive. Thousands of US factories have been shuttered
and millions of jobs have been lost or displaced over the
past decade as a result."
He went on to share that, "There is no question that this
is what one might call a 'put-up or shut-up' moment for US
lawmakers. American jobs and wealth are flowing out of the
US, across the globe to China and other countries with
cheap labor, lax environmental standards, and no
compunction about flouting WTO rules to gain an unfair
competitive trade advantage. This has got to stop."
It would be a mistake to overlook the senator's comments,
or to simply mark them up to the traditional politics of
organized labor and Schumer's relationship with them. This
week, during a separate congressional hearing of the House
Ways and Means Committee, Republican Congressman Dave Camp
(Michigan), asked whether "enough was doing to push China
... on its egregious economic barriers" specific to its
currency manipulation, the country's "Indigenous
Innovation" policies, and ongoing intellectual property
compliance with WTO rules.
What both provide is, at the base of their comments, a
critical insight into the inner-workings of Washington's
political class. Whatever the heritage of those ideas,
which for several decades have knit together the two
countries, they are under strain as never before. To the
extent both sides of the aisle hold similar frustrations
about China's economic policies, DC will find a way to vent
the intensifying political pressure.
What remains to be seen is the form this political pressure
will take: on the table appears to be a handful of likely
options, most likely of which may be a set of
countervailing duties imposed on China for its currency
practices, the remedy presented by Schumer in his Currency
Exchange rate Oversight Reform Act of 2010 (S.3134). During
this week's House Ways and Means Committee hearing on
"China's Trade and Industrial Policies", chairman Sandy
Levin (Democrat, Michigan) said simply but forcefully " ...
China must change its ways". Straight-forward words
certainly, but important coming from an influential
congressman long known for his reputation of urging caution
and balance in America's relationship with China.
It would appear that, if politicians like Levin can win the
day, Washington's approach to China will incorporate more
than just a single-minded emphasis on the country's
currency policies. Specifically, Levin appears to be
working for a compromise that would take into account the
whole of Beijing's economic policy, what he and other
policy-makers understand to be a form of national
As Levin stated, "There are other policies in China that
place US companies and workers at a disadvantage, often in
clear violation of China's WTO obligations. They are part
and parcel of the overall trend in China's approach to
trade ... the selective use of tax rebates to stimulate
certain exports; export restrictions on raw materials;
trade-distorting subsidies, discriminatory product
standards ... weak laws and weak enforcement of labor and
environmental laws; state-owned enterprises that
discriminate against US companies. All of these policies
have a common thread: they have the purpose or the effect
of tilting the playing field to favor Chinese companies and
against US companies, workers and farmers."
Senator Debbie Stabenow (Democrat, Michigan), provided in
testimony to the USCC panel her plan to introduce the
"China Fair Trade Act, legislation that will prevent
Federal taxpayer dollars from being used to purchase
Chinese products and services until they sign on to and
abide by the WTO Agreement on Government Procurement, which
will allow American companies to export into their
government markets." This sort of move, while it remains
uncertain as to whether it will be advanced in the House,
does represent the sort of escalation between two countries
that tends to indicate a looming conflict over trade that
could, given the present economy, too easily get out of
During last week's USCC hearing, Congressman Tim Ryan
(Democrat, Ohio), a long-time critic of China's currency
policy and one of the first to propose legislation
attempting to address the matter, echoed the concerns of
his colleagues but perhaps most importantly hinted at
deeper concerns which are too often glossed over by those
who suppose such critics want to simply hit rewind on the
global economy: "Several years ago, progress toward further
market liberalization began to slow and it became clear
that some parts of the Chinese government did not yet fully
embrace key WTO principals."
Against the backdrop of a general economic frustration in
the US, it is easy to miss that much of what lies beneath
Washington's concerns is not simply Beijing's economic
policy but a more general and caustic concern that how
China was anticipated to evolve and embrace global rule
sets and overall liberalize is not happening, which begs
the political question of whether the sacrifice American
workers are perceived to have made by opening their markets
to China has, in fact, been worth it.
Understanding what Washington is currently obsessed with
talking about, and separating it from what is actually
likely to get acted upon, is not an easy task. This
realization is essential when evaluating the likelihood of
actions such as those suggested by Schumer, Stabenow, or
Ryan to be implemented. Specific to the matter of China's
presence in the WTO, Alan Wolff, chair of the Committee on
Comparative Innovation Policies at the National Academies,
provided to the USCC during last week's hearing a reminder
that "The United States believed that bringing China into
the WTO would foster domestic economic reforms within
China, which would ultimately create a functioning large
and growing market for US goods and services ... Large US
headquartered multinational businesses shared this vision.
They saw China as a major market and a major source of
supply for all other markets including the United States."
This sentiment is perhaps the most powerful counterweight
to the building political frustration in Washington;
specifically, the interest of American business remains in
many ways to maintain the status-quo with China. Changes in
Beijing's currency will have the immediate effect of
changing costs for outbound exports from their
Chinese-based subsidiaries, possibly forcing costly
production relocations, and the even more dire possibility
of the Chinese market growing additionally difficult to
access and sell into.
It has been quite literally several decades since the
interests of the working class and the ownership class have
been so front and center in Washington as they are now. The
still-powerful pro-business lobby will push back against
bills like those mentioned earlier, but unless the American
economy begins to show additional life, even organizations
like the critical Business Roundtable may be ineffective at
limiting a political retaliation against China.
During last week's testimony, this was communicated most
eloquently by James Bacchus, formerly a two-term chairman
of the Appellate Body of the WTO and a former Special
Assistant to the United States Trade Representative in the
Executive Office of the President. "I worry when I hear
other Americans describe China as a 'threat' to the United
States," he said. "I am reminded at such times of the
warning of Thucydides in his history of the Peloponnesian
War - that a belief in the inevitability of conflict can
become one of the main causes of conflict. Trade disputes
between the United States and China are inevitable.
Conflict is not."
The recent USCC hearing on China's WTO compliance was
ostensibly about just that, but it quickly became the
tapestry for a broader conversation that is taking place
within Washington about whether China's growth has come at
too great a cost for Americans, and whether its policies
and practices will ever embrace the rough outlines of what
the US recognizes as a politically liberal environment.
This debate is growing in intensity, and holds the
potential to redefine the contours of the two countries'
relationship in ways that may prove as foundational as
China's first timid entry into free-market reforms in the
early 1980s. The stakes, for Chinese and Americans, have
not been any higher than they are now for decades.
Benjamin A Shobert is the managing director of Teleos Inc
(www.teleos-inc.com), a consulting firm dedicated to
Sunday, 14 February 2010
By Peter Lee
Asia Times Online
The question of the day in Washington is will the People's
Republic of China veto further United Nations Security
Council sanctions against Iran over Tehran's nuclear
Informed opinion says "no".
China has exercised its veto only six times in 30 years on
the council. In matters core to national priorities, like
punishing countries such as Guatemala and Macedonia for
their ties to the Republic of China (Taiwan) and protecting
the interests of Pakistan, it has acted alone.
However, on broader geopolitical issues, in recent years it
has vetoed resolutions only when joined by at least one
other Security Council member.
France and the United Kingdom are lined up solidly behind
the United States on Iran's nuclear program, which some say
is geared towards making a nuclear bomb, a charge Tehran
Russia this year is interested in improving ties with the
US and Europe and has moved toward support of sanctions. No
Russian veto, no Chinese veto, says the conventional
On the other hand, chances of China voting for sanctions
are slim. A press report covering Chinese Foreign Minister
Yang Jiechi's visit to Paris at the beginning of February
says it all: "China Says Iran Sanctions Hinder Diplomacy."
Abstention is, therefore, China's most likely course.
Beijing's reaction might be expected to be a dismissive and
a resigned shrug: a symbolic vote, another toothless round
of sanctions, more political kabuki, and eventually
business as usual.
However, China's expected non-vote will be accompanied by
new feelings of unease and anger, reflecting Beijing's
growing suspicion that an important motivation for the Iran
sanctions, and the escalation of Iran tensions in general,
is Washington's desire to employ the issue as a wedge
In past years, China could regard US sanctions against
authoritarian regimes with a certain amount of complacency.
The George W Bush administration's heavy-handed approach
dismayed and divided natural allies of the US and drove its
targets deeper into China's embrace.
However, the Obama administration has decided to supplement
brute power with smart power. It apparently promotes
divisive international initiatives only when the splits in
international opinion and alliances are expected to go
China first got a taste of the smart-power approach in
December at the Copenhagen climate summit. The US linked
the release of billions of dollars of climate adaptation
aid to vulnerable developing countries with China's
acceptance of a satisfactory transparency regime. Its
delegation passed the message to smaller nations that
China's intransigence was standing between them and
billions of dollars of much-needed assistance.
Despite the treaty debacle, the geopolitical results for
the Obama administration were encouraging. The European
Union sided with the US. According to an internal Chinese
report, a good number of Group of 77 nations were, for the
large part, influenced by the American position but did not
openly confront China. China cobbled together an alliance
with the emerging economies of Brazil and India and,
despite a concerted "blame China" effort by the US and the
UK, was able to limit the political damage.
However, it was a sobering experience for Chinese
diplomats. The report concluded "A conspiracy by developed
nations to divide the camp of developing nations [was] a
Now, the Obama administration is picking on the regionally
and globally unpopular government of Iran, thereby exposing
China as the regime's lone international supporter of note.
The US has worked to bring the EU and Russia to its side.
The EU, at least, is now an enthusiastic ally. Relieved to
be dealing with a judicious and consultative American
president, it no longer sees the need to accommodate a
greater role for China on the world stage.
Russia has joined the American team (with sub voce
reservations), reportedly in response to the Obama
administration's concessions on shelving plans for a
missile defense shield in Eastern Europe.
The State Department has also worked with the Gulf states
to gain their support for a policy of putting Iran in its
As far as the China issue is concerned, America's direct
solicitation of China's Security Council vote involved
Obama passing the word to President Hu Jintao that China's
interests would suffer if diplomatic pressure failed,
Israel attacked Iran's nuclear facilities, and the price of
oil went up.
It is unlikely that the Israel attack card was persuasive
to the Chinese leadership, and did little more than
convince them that Washington was using it as an excuse to
justify an extension of US influence in the Middle East.
A pre-emptive attack by Israel to nip Iran's nuclear
ambitions in the bud is unlikely.
Despite Tel Aviv's brave talk of its ability and
determination to launch a raid independent of US approval,
even a resounding success would probably only slow down the
program a few years while earning the undying enmity of the
Iranian people and the Muslim world toward Israel ... and
the United States, which would have to provide Israel with
flight privileges over Iraq to stage the attack.
American assertions that the Iranian nuclear program will
spark a ruinous arms race in the Gulf no doubt elicited
similar skepticism from China, with the unspoken
observation that, since most of those arms would be
supplied by the US and EU, the onus for (and profits of) an
arms race would probably fall to the West.
American efforts to wedge the Arab states away from China
are more likely to attract Beijing's attention and concern.
James Phillips of the Heritage Foundation spun US Secretary
of State Hillary Clinton's current trip to the Middle East:
Clinton will be looking to the Arabs to "act as a
counterweight [to Iran] on China and help unlock its
Security Council vote.
The US is hoping to use these discussions with the Arabs as
a way to encourage China to look at its long-term economic
interests," Phillips added. "The Arabs could let the
Chinese know that it will hurt them economically with the
Arab countries in the long run if China clings to this
United States protestations that all this diplomatic
maneuvering directed at China is justified by the need to
exhibit international unity on Iran ring hollow.
Invocation of the Israeli attack and the Gulf states arms
race bogeymen notwithstanding, the primary justification
for the current spasm of concern over Iran's nascent
nuclear activities is the dreaded Western "impatience",
which appears very similar to the manufactured impatience
that sent the coalition of the willing charging into Iraq
The stated remedy for this impatience, the UN sanctions, is
unlikely to work.
Russia cares enough about its relationship with Tehran to
make sure anything that gets through the Security Council
will not be particularly catastrophic.
On February 11, Deputy Foreign Minister Andrey Ryabkov made
this memorable statement: "We do not think sanctions will
work, but we understand that it is impossible to get by
without them in certain circumstances."
With early reports that a massive government presence
marginalized Green Movement demonstrators on the February
11 anniversary of the Iranian revolution of 1979, regime
change in Iran is probably off the table, too.
Even if a new regime came to power, Iran's national
commitment to nuclear power - and the perceived nuclear
weapons threat to the region - would probably remain
By conventional geopolitical logic, China would seem to
have the right idea: more jaw-jaw and engagement or, as it
called for in a recent editorial, "patience, patience and
But US policy seems to be moving in the opposite direction,
stoking the crisis instead of lowering the heat.
So what's China's takeaway from the Iran crisis?
Absent an immediate, credible threat of an Israeli attack
on Iran, the US is rushing the international community
toward "crushing sanctions" on Tehran that, if carried out,
would result in disruption of Iran's energy exports.
If this were to actually occur, the big loser in the Iran
crisis would be China.
As a Chinese analyst told Reuters: "Fully going with
Western expansion of sanctions on Iran so they restrict
Iran's energy exports would amount to disguised sanctions
against China, and China certainly won't agree," Wang Feng,
a researcher at the Chinese Academy of Social Sciences told
the Global Times, a Chinese newspaper published on
Reportedly, the US had advised China it would dispatch
Hillary Clinton to visit Iran's enemies in the Persian Gulf
and ensure that, if sanctions disrupted the supply of
Iranian oil, Saudi Arabia and its associates would ensure
that China's petroleum needs would continue to be met.
It is unlikely that China's vision of its energy security
involves relying on the US's good offices to deal with the
consequences of a US-imposed policy that it rejects and had
no voice in formulating.
In any case, the prospects for an oil-price Armageddon are
unlikely. Given free-market realities and the greed of oil
producers inside and outside the Gulf, the world would
suffer as much as China if Iranian crude disappeared from
For Beijing, the biggest concern is its perception that
Europe, Russia and the Gulf states are signing on to an
anti-Iran initiative that could impact China's interests in
such a major way without accommodating China's priorities.
From Beijing's point of view, China is the main superpower
stakeholder in the Iran crisis.
So it is asking why isn't it being consulted? Indeed, why
aren't its critical interests given priority, instead of
subjecting it to moonshine about an Israeli attack, an arms
race in the Gulf and lectures about its geopolitical
China is not a threat to the international order, but it is
its most independent and uncontrollable element. There are
growing signs of a shared consensus in the West that
reliance on China as a stabilizing financial, economic and
geopolitical factor must be reduced.
The past few years have been good to China's competitors
-especially India - and bad for China's allies - Pakistan
By accident or design, the Obama administration's decision
to heat up the Iran controversy has driven another wedge
between China and the US, the EU, the Gulf states and even
The issue for China is whether the purpose of America's
Iran campaign is to isolate Iran ... or to isolate China?
This is a consequence of China's participation in the
security initiatives that the US chooses to organize to
protect and promote its own and loyal allies' interests.
China responded to the escalation of the Iran nuclear
crisis with a remarkable lead editorial in the Global
Times, the international affairs organ of People's Daily,
the government mouthpiece,.
The editorial, with the eye-catching title "Iran and the
West: Neither Should Think of Taking China Hostage",
painted China as the victim of the standoff. In an effort
to be even-handed, both Iran and the West are criticized
for their intransigence.
Nevertheless, both the West and Iran are unheeding at this
time. They both believe that only if they are unyielding,
then the other side will back off. This unenlightened
attitude even extends to their attitude toward China. Both
sides believe that all that's needed is to put pressure on
China, then China will, without considering its own
interests ... lower its head to them ... This thinking is
The use of the loaded term, "lower its head", conjuring
images of the humiliating kowtow, instead of a more neutral
term such as "support one or the other" is an indication
that red lines are being drawn.
The fact that China's main worry is the West, and not Iran,
is unambiguously conveyed in the editorial's conclusion.
Recently in Western public opinion has been a call to use
the Iran issue to isolate China. This is extremely
superficial ... China is a big country and its interests
must be respected. China's dilemma must be sympathized
with. China's proposal opposing sanctions must be
understood. The big powers must cooperate and negotiate on
the Iran issue ...
China is a great country. If anyone seeks to compel her, to
injure her, they will certainly pay the price. Pretty
The editorial is a clear indication that China considers
itself the target - or at least intended collateral damage
- in America's anti-Iran campaign. It makes the case that,
if the Obama administration sincerely cared about its
relationship with China, Washington would back off from the
sanctions campaign and allow negotiations to continue.
But that doesn't look like it's going to happen.
Sanctions will probably go ahead, with China either
abstaining or throwing in a tactical "yes" vote to postpone
an overt breach, and Washington will obtain another point
of leverage against China in the Persian Gulf.
If that happens, China will have to think about adjusting
to a new world situation in which the West seems less
interested in bargaining for its support or respecting its
Peter Lee writes on East and South Asian affairs and their intersection with US foreign policy.
Thursday, 11 February 2010
China's fears of rich nation 'climate conspiracy' at Copenhagen revealed
'Conspiracy to divide developing world' will make future talks harder, says leaked government report
Rich nations furthered their "conspiracy to divide the
developing world" at December's UN climate summit in
Copenhagen, while Canada "connived" and the EU acted "to
please the United States", according to an internal
document from a Chinese government thinktank obtained by
The document, which was written in the immediate aftermath
of Copenhagen but has only now come to light, provides the
most candid insight yet into Chinese thinking on the
"It was unprecedented for a conference negotiating process
to be so complicated, for the arguments to be so intense,
for the disputes to be so wide and for progress to be so
slow," notes the special report. "There was criticism and
praise from all sides, but future negotiations will be more
The authors - all members of a government environmental
research institute - were not part of the Chinese
negotiating team, but their paper was commissioned by the
environment ministry and circulated internally to the
minister, vice-ministers and department chiefs in the days
after the conference. The ministry currently plays only a
marginal role in climate policy making but many of the
paper's observations were echoed by China's chief climate
negotiator, Xie Zhenhua, in a recent speech given at
The authors were downbeat about the prospects for
international talks and China's position within them.
"China, which was in the conference spotlight, played an
active and constructive role, but was also under huge
international pressure. It is predictable that our country
will face a tougher challenge in future climate talks," it
Analysing international reaction to Copenhagen, the paper
lists a selection of responses from the UN
secretary-general, the Chinese foreign minister, the
European commissioner, prominent NGOs and major media
organisations, including the Guardian. It was written
before the publication of the most strident criticisms of
China's tactics by Mark Lynas, climate change adviser to
the Maldives, and the UK climate and energy secretary, Ed
Contrary to those views, the paper argues that the primary
goal of China's negotiators was not to spoil the summit,
but to resist a deal from rich nations that would put an
unacceptable burden on China and other developing
In their evaluation of the outcome, the officials' top
point is that "the overall interests of developing
countries have been defended" by resisting a rich nation
"conspiracy" to abandon the Kyoto protocol, and with it the
legal distinction between rich nations that must cut carbon
emissions and developing nations for whom action is not
The internal report acknowledges that unity among China's
traditional allies in the developing world became harder to
maintain in Copenhagen. "A conspiracy by developed nations
to divide the camp of developing nations [was] a success,"
it said, citing the Small Island States' demand that the
Basic group of nations - Brazil, South Africa, India, China
- impose mandatory emission reductions.
The paper is scathing about the US-led "umbrella group",
which it says adopted a position of inaction. Canada, it
says, "was devoted to conniving" to convince the world that
its pledge of a 3% emissions reduction between 1990 and
2020 is significant, while having no intention of meeting
its Kyoto protocol target of 6%.
There are no comforting words for the European Union, which
used to pride itself on playing a leadership role in
climate talks. "Copenhagen was a setback for the EU", the
authors say, in part because Europe "suggested the
abandonment of the Kyoto protocol in order to please the
US." The ministry has not responded to the Guardian's
request for a comment on the leaked paper.
The authors note that the Copenhagen accord which emerged
from the summit was not legally binding and lacked a global
target for emissions. But it says that overall the accord
was a "step forward", noting progress on a consensus to
limit global warming within 2C, progress on the funding by
rich nations of climate change adaptation measures in
poorer nations and a "last minute" compromise by developing
nations on the verification of their carbon pledges.
Lynas, who was present at many of the key negotiating
sessions, said: "It's astonishing that this document
suggests the Chinese really believes the absurd conspiracy
theory that small island states were being played like
puppets by rich countries. The truth is that the small
island states and most vulnerable countries want China and
its allies to cut their emissions because without these
cuts they will not survive. Bluntly put, China is the
world's No1 emitter, and if China does not reduce its
emissions by at least half by mid-century, then countries
like the Maldives will go under."
He added: "I think these claims of conspiracy are just a
bullying tactic, to force more progressive developing
countries back into line in case they too start demanding
more serious action by China."
Speaking last month, China's chief climate negotiator, Xie
- who also serves as vice-minister of the National
Development and Reform commission which controls China's
climate policy - also referred to the pressure from small
island nations. "The rich nations were completely trying to
make conflict among developing countries," he said.
He also described the "international fight on climate
change" as a contest for economic development space and
stressed that the way forward for China was to put more
effort into building a low-carbon economy. "Countries with
low-carbon industries will have a developmental advantage,"
said Xie. "Some people believe this is a global competition
as significant as the space race in the cold war. "
The concluding section of the leaked document proposes a
series of constructive initiatives. In what appears to be a
bid by the environment ministry to play a greater role in
carrying out climate-related policy, the report suggests
amending air pollution control laws to include greenhouse
The official US version about what happened at Copenhagen
is also harsh. Todd Stern, the state department climate
change envoy, said this week that the summit "a snarling,
aggravated, chaotic event." But America attributes the
difficulties to a central divide between those countries -
led by China - insisting rich countries bear the entire
burden of reducing greenhouse gas emissions and the
position held by the US that rapidly emerging countries
must also take action. Stern suggested the divide had not
been bridged. China, along with India, South Africa and
Brazil, had been "ambiguous" in its follow-up commitments
to the accord.
Tom Burke, the influential environmentalist and a founder
of E3G consultants, said: "There was indeed a lot of work
done to get developing nations to put pressure on China.
[But] it was not a conspiracy of any kind unfortunately as
Britain was acting entirely alone on this front. Neither
our EU allies nor the US mounted any kind of diplomatic
effort. Pretty well everyone in Copenhagen, not just the
developed countries, complained about China's blocking
Saturday, 30 January 2010
January 25, 2010
NOWHERE is renationalisation more blatant than in the rich
coalfields of Shanxi.
Yet there's money lying beneath this unalluring mix. Loads
of it. Taiyuan is scattered with Bentley showrooms, Rolex
boutiques -- in fact, all the luxury brand names from New
York, London, Paris, Hong Kong and Shanghai. And the locals
like to talk about money.
"When a Shanxi businessman goes to Beijing to look for
houses, he doesn't just look at one apartment -- he looks
at the entire side of the building," a Shanxi executive
said in Taiyuan last week.
Most of the money has come from coal, the black gold that
fuels China's power stations and its steelmaking blast
furnaces, processing Australia's iron ore. Fortunes have
been built on the back of the province's mine workers, and
with their blood: there were 2631 deaths in China's coal
mining sector as a result of mine accidents last year, but
the figure was down by 20 per cent on 2008.
Shanxi is changing. Once home to thousands of small and
mid-sized mines and mining companies, now the government is
taking over again. Shanxi's coal sector is a high-profile
symbol of renationalisation: the second coming of
Tens of thousands of state-owned enterprises were pulled
apart in the 1980s to allow capitalism to develop. But now
the country's leadership is becalmed as it heads into its
last two years in power after years of only incremental
China's ruling politico-corporate complex has also been
emboldened by the opportunities of the global financial
crisis, which saw more than $US1.5 trillion pumped into the
economy, most into state-run companies.
The crisis has also been used to step up plans for
consolidation in eight key industries: the aim of this is
to have a smaller number of large companies which China
wants to be able to compete with large foreign
multinationals as well as expanding globally.
It's not just on a national level. In Shanxi, home to 30
million people, seven provincial coal miners have been
allocated a slice of the private sector at a bargain price.
In Shanxi close to 2000 small mines have been forceably
reclaimed, officially for efficiency, health and safety and
environmental concerns. These are real concerns: the
government attributes the fall in deaths to small mine
closures and says 70 per cent of fatalities are at small
mines. But one miner owner says he instituted the extra
safety and environmental controls but was still forced to
sell to the government at a loss of 5 million yuan
Businesses from the wealthy province of Zhejiang and its
famously rich capital Wenzhou are the biggest single source
of investment in Shanxi's coal sector.
"Wenzhou, one of the regions with the most active private
economy, has only 4.5 per cent GDP growth in the first half
of last year, far below national level," Xia Yeliang, a
professor at Beijing University, says.
"One of the reasons is Wenzhou's private entrepreneurs have
invested in about 600 coal mines in Shanxi with 200 billion
yuan, which face mergers now.
"It has severely hit Wenzhou's economy. The
renationalisation will have irrevocable impacts on China's
economy. It will have a profound negative effect on wealth
distribution and future development of China, and it must
be stopped now."
Lawyers claim their clients are getting only about 30 per
cent of the real value of the business in the forced sale
of coal mines. The provincial government has appointed its
own valuer, but lawyers have claimed this is against the
law. Mines are effectively being bought back for the price
of exploration licences handed out during the first decade
of the century and this does not take into account capital
spending and commercial contracts, says Zhang Yucheng, a
lawyer at national Chinese law firm Dacheng Law Office.
Last year China depended entirely on government funding to
achieve its 8.7 per cent growth. It was a tough year for
businesses in China -- recent government figures showed 20
per cent of small businesses went broke between November
and May and a further 20 per cent went close to collapse --
but China's state-owned enterprises got richer.
Last week the state press reported that China's SOEs were
expected to generate 750 billion yuan in profits and
achieve sales revenue of 12 trillion yuan in 2009.
In the first 11 months of 2009, the 131 SOEs under the
direct supervision of the State Assets Supervision and
Administration Commission (SASAC) posted 3.4 per cent
year-on-year growth in profits to 710.9 billion yuan on
revenues of 11.1 trillion yuan. "China will continue to
push ahead with the restructuring of its SOEs next year and
will encourage state-owned companies to pursue mergers and
acquisitions across different regions and countries," SASAC
director Lo Rongrong says. "We will also back private
enterprise investments in state-owned entities."
Initially, aggrieved mine owners, unaware of their legal
rights, were loath to take on the government. But now
China's biggest law firm, Dacheng, has taken on the case
for a group of mine owners.
"The Shanxi government has no right to handle the ownership
of private coal mines. It violates the Chinese
constitution, contract law and mineral resource law," Zhang
"The transfer deal price should be assessed according to
The law firm is pushing for the appointment of an
independent arbiter to reassess the valuation of the mines
and says the Shanxi government has breached a number of
laws and regulations.
This is an interesting case in a country with no private
email@example.com - Michael Sainsbury
Monday, 11 January 2010
BEIJING, Jan. 10 (Xinhua) -- The General Office of the State Council, China's cabinet, Sunday issued a notice that required central governmental departments and local governments to strengthen management, stabilize market expectations and facilitate stable and sound development of the real estate market.
"With the recovery of the real estate market, such problems as excessively rising house prices have recently emerged in some cities, which call for great attention," said the notice.
It listed 11 specific measures which should be taken in five aspects -- increasing supply of low-cost houses for low-income families and common residential houses, encouraging reasonable house buying while restraining purchases for speculation and investment, strengthening real estate project loan risk management and market supervision, speeding up construction of housing projects for low-income households, and specifying responsibilities of local governments.
On increasing supply of low-cost houses for low-income families and increasing supply of common residential houses, the notice said efforts should be made to construct more smaller-sized low- and medium-pricing apartments while increasing land supply for residential housing projects.
According to the notice, governments at all levels should act to push property developers to quicken project development and sales of finished projects.
The notice also said cities nationwide, especially those with high house prices and excessively rising house prices, should step up efforts to build more affordable or low-rent housing projects for low and medium income families.
To increase land supply for residential housing projects, the notice required city governments nationwide to lay out as soon as possible the residential housing construction plan for 2010-2012, which should be specific on each year's construction scale of smaller-sized low- and medium-pricing houses, low-rent houses and affordable houses for low and medium income families.
On encouraging reasonable house buying while restraining purchases for speculation and investment, the notice said financial institutions should continue encouraging first-time ordinary home buying while strictly carrying out mortgage loan policies on second-time home purchasing.
It said the down payment requirement for those families applying to buy a second or more houses backed with loans should be no less than 40 percent, and the mortgage rates should be strictly settled on the basis of loan risks.
On strengthening property project loan risk management and market supervision, the notice said financial institutions should not grant loans to any developers failing to meet the minimum amount of capital needed to jumpstart a new commercial property.
It also asked the People's Bank of China and the China Banking Regulatory Commission to enhance supervision on property credit among commercial financial institutions.
Efforts should also be made to strengthen monitoring of capital flow and trans-boundary investment and financing activities so as to prevent credit from entering the real estate sector illegally and stop overseas speculative funds from jeopardizing China's property market, it said.
The notice also asked the Ministry of Housing and Urban-Rural Development and other departments to take more measures to crack down on property developers that hoarded land or houses for more profits, and on real estate brokerage which conducted price deception or spread rumors to jack up house prices.
The taxation authority should thoroughly investigate tax fraud cases by property developers and severely punish those violators, while the State-owned Assets Supervision and Administration Commission should further regulate investment activities by major state-owned enterprises in the property market, according to the notice.
On speeding up construction of residential housing projects for low-income households, the notice said governments at all levels should strive to help solve the housing problem of 15.4 million low-income urban households by the end of 2012.
It urged local governments to make more efforts on the renovation of "shanty towns" and increase low-rent houses and affordable houses to low-income families.
On the fifth and final aspect, the notice said more work needed to be done to improve the working mechanism in which provincial governments should assume general responsibility in stabilizing property market and solving the housing problem for low-income families while city-level governments should take the responsibility of implementing specific measures.
Local governments should annul any rules in the property market that were in conflict with the macro-control policies adopted by the central government, it said.
The lengthy notice came after house prices in 70 large and medium-sized Chinese cities rose 5.7 percent year-on-year in November 2009, continuing an escalation which has triggered fresh concerns over property speculation and property bubble in the country.
The November rise, which was 1.8 percentage points higher than the jump in October, was the ninth straight monthly increase of house prices in the survey of real estate across major Chinese cities.
China's property market received a blow and began to fall in late 2008 after the global financial crisis crippled China's once-essential exports and the economy as a whole.
But a series of favorable measures, a credit boom and speculative investment in 2009 had led to a quick recovery of China's property market and price hikes, which started around March 2009.
Statistics from Goldman Sachs showed that over the past six years, housing price hikes had outpaced income rises by 30 percentage points in Shanghai and 80 percentage points in Beijing.
In Beijing, the housing price of per square meter is as much as a resident's seven months' salary on average.
Chinese Premier Wen Jiabao told Xinhua in an interview on Dec. 27 that the government would use taxes and mortgage rates to stabilize house prices and take measures to clamp down on house speculation.
Starting Jan. 1 this year, the government started to reimpose a sales tax on homes sold within five years of their purchase, after cutting the period to two years in January of 2009 to boost the then falling property market.