Global News Journal

from Africa News blog:

Was South Africa right to deny Dalai Lama a visa?

By Isaac Esipisu

Given that China is South Africa’s biggest trading partner and given the close relationship between Beijing and the ruling African National Congress, it didn’t come as a huge surprise that South Africa was in no hurry to issue a visa to the Dalai Lama.

Tibet’s spiritual leader will end up missing the 80th birthday party of Archbishop Desmond Tutu, a fellow Nobel peace prize winner. He said his application for a visa had not come through on time despite having been made to Pretoria several weeks earlier. (Although South Africa’s government said a visa hadn’t actually been denied, the Dalai Lama’s office said it appeared to find the prospect inconvenient). Desmond Tutu said the government’s action was a national disgrace and warned the President and ruling party that one day he will start praying for the defeat of the ANC government.

It’s the second time the Dalai Lama has been unable to honour an invitation to South Africa by Tutu after failing to make it to a meeting in 2010.

South Africa will certainly win more plaudits in Beijing, which last week agreed to $2.5 billion in investment projects with during a visit by South African Deputy President Kgalema Motlanthe.

But pro-Tibet activists say South Africa is undermining its credentials as a country of freedom and democracy, established after the end of white minority rule a generation ago.

from The Great Debate:

What is the best strategy against Chinese cyberattacks?

By Ian Bremmer The views expressed are his own.

All eyes should be peeled on China, but not for the reason you think. While the biggest structural risk right now is global rebalancing, especially between China and the U.S., there is another important threat from China: cyberwars. Cyberattacks are one of the biggest fat tails (along with climate and North Korea).

It’s no surprise that the latest Google hack attack came from China. The presumption is that the vast majority of cyber attacks hitting the U.S. are coming from the Chinese government. It’s very hard to know where threats are originating – country-wise and/or person-wise -- because it’s very difficult to go back and figure out the paper trail. But at a minimum, there is an environment in China that tolerates cyber attacks.

Proprietary information around technologies – gaining profit shares, increasing revenues – allows a country to be much more economically competitive. China has leverage because everyone wants to get into China. If you want to make something in their country, you have to share the technology.

The Chinese government can really benefit from having access to proprietary data, whether it’s about Exxon's oil reserves or pricing of commodities of proprietary technologies, such as American telecommunications. China’s become much more competitive and therefore has become much more of a threat. If it’s using a non-judicious system to gain economic advantage, we need to take that very seriously.

China did something similar with high-speed rail – and that was through legal means. They undermined German and French companies in order to gain access to the technology and they now have built the best high speed rail system. If they can access that kind of information through hacking, that’s going to be seen as a direct threat.

This isn’t to say that the Chinese are evil. Historically, Western institutions invested in China, but then took the money back West. China obviously wants a good chunk of that action.

from Afghan Journal:

In Pakistan’s Gwadar port, Chinese whispers grow

First, China helped develop Pakistan's Gwadar port from scratch on the Baluchistan coast to take the pressure off the country's main port of Karachi, a few hundred miles to the east. Now Pakistan's defence minister has said that it would like its long-time ally to build a naval base at Gwadar, which sits on the doorstep of Gulf shipping lanes, less than 200 kms from the mouth of the Straits of Hormuz.

China, which provided more than 80 percent of the port's $248 million development cost, has moved quickly to distance itself from Pakistani Defence Minister Ahmad Mukhtar's remarks about a naval base in Gwadar. The foreign ministry said China was not aware of any such proposal.

While China has stood by Pakistan in its hour of embarrassment following the discovery of Osama bin Laden living in relative comfort in a garrison town, it might be squirming a bit at its ally's rather aggressive portrayal of their ties. The last thing it needs is to trigger off another round of alarm bells in the region about its big power objectives in the Indian Ocean, especially when it is not ready yet.

As Gideon Rachman wrote in the Financial Times this week (behind a paywall) the Chinese may be wincing at the appearance of the story about building a military base on the Pakistani coast in the Western press "because it will heighten the perception that China is overplaying its hand in the Pacific; an idea that has helped America to strengthen its military alliances across the region."

The spectre of Chinese ships including perhaps the aircraft carrier that is under development and submarines operating from Gwadar is sure to feed insecurities in the region, drive countries to ramp up military spending and deepen alliances.

India, already worried about an increasingly assertive China, will be sufficently alarmed to pour more funds into its navy besides deepen ties with the United States and of late Japan to balance its interests in the region. Already the Indian Defence Minister A. K. Antony has expressed concern about the growing defence ties between China and Pakistan.

UNsensational? Five more years of Ban Ki-moon

It’s hard to find a delegate to the United Nations who despises U.N. Secretary-General Ban Ki-moon. But it’s even harder to find someone who thinks he has the gravitas and charisma of his Nobel Peace Prize-winning predecessor Kofi Annan, who invoked the wrath of the previous U.S. administration when he called the 2003 invasion of Iraq “illegal.” As one senior Western official, who declined to be identified, said about Ban: “It’s not as if he’s lightning in a bottle, but we can live with him.”

The former South Korean foreign minister is in the final year of his first five-year term and is widely expected to run for another stint as the supreme U.N. official. The formal re-election process is likely to commence in the coming months. In the meantime, Ban is visiting the capitals of key U.N. member states to gauge his chances of keeping his job. Those chances, U.N. diplomats say, are excellent. So far, no country has nominated any candidate to oppose him. “I’d put my money on Ban Ki-moon getting a second term,” said a Security Council diplomat.

The 15-nation Security Council nominates the secretary-general, though the choice has to be confirmed by the 192-nation General Assembly. Despite the veneer of democracy, it is the five veto-wielding permanent council members — Britain, China, France, Russia and the United States — who choose the top U.N. bureaucrat in New York. And none of the five has any serious objections to a second and final term for Ban, diplomats say.

Some people say that running the United Nations is the toughest job on earth. With little real power, he spends his time mediating and negotiating behind closed doors, getting blamed for member states’ failures and receiving no credit for his off-camera successes. National lobbyists push and pull him in all directions. The five permanent Security Council members, known as the “P5″, regularly insist that he acquiesce to their demands, often pressuring him to reserve a healthy portion of top U.N. jobs for their nationals or preferential treatment for themselves or their allies. Journalists harangue the secretary-general to disclose the details of sensitive negotiations, which he usually tries to keep secret under the label of “quiet diplomacy.” Human rights groups routinely skewer him for not being tough enough on the rulers of despotic countries, which are, after all, member states like all the others and don’t take kindly to criticism.

Ban has been no exception. He has been publicly clobbered for not congratulating jailed Chinese dissident Liu Xiaobo for winning the 2010 Nobel Peace Prize or raising his detention with President Hu Jintao during a recent visit to China. He was hung out to dry for not being tough enough on Sri Lanka’s government and Sudanese President Omar Hassan al-Bashir, who was indicted by the International Criminal Court for genocide in Sudan’s western Darfur region. Arab and other delegations from the developing world accuse Ban of being a U.S. lackey, noting how often his statements on the Israeli-Palestinian conflict and other issues echo those of the U.S. State Department or White House.

As much as Ban has sought to please his P5 kingmakers, he has managed to run afoul of each of them in the past. In 2008 Russia accused him of siding with the United States, France and Britain in supporting the secession of Kosovo from Serbia, which Moscow fiercely opposed. U.N. officials said at the time that Russia even threatened to block his second term over Kosovo (Ban made it up to them later). Both China and Russia complained that Ban had voiced public support for Egyptian demonstrators calling for the ouster of President Hosni Mubarak, who resigned last week. The United States, Britain and France were annoyed with Ban in 2009 for departing from past practice and not referring to the Georgian breakaway region of Abkhazia as part of Georgia. The Georgian ambassador accused Ban of succumbing to pressure from Russia, which fought a brief war against the former Soviet republic of Georgia in 2008. Ban denied the charge.

Ban’s unwavering stance against Ivory Coast’s incumbent leader Laurent Gbagbo, who refused to recognize U.N. certified election results from November 2010 that say he lost to rival Alassane Ouattara, surprised many U.N. watchers who are more accustomed to seeing him sitting on the fence on tough issues. Philippe Bolopion of Human Rights Watch, who has been one of the secretary-general’s toughest critics, welcomed Ban’s “swift and unequivocal reaction” to Gbagbo, who ordered U.N. peacekeepers out of the world’s top cocoa producer. So far the secretary-general has refused to withdraw his blue helmets and the deadlock continues.

from Tales from the Trail:

Panda diplomacy: the remix

The latest chapter in the long story of panda diplomacy was written at Washington's National Zoo, where the Chinese government agreed to lengthen the "loan" of popular panda pair Mei Xiang and Tian Tian for another five years. Actually, the loan is conditioned on whether they produce a new heir or heiress to the cuteness of panda-dom in the next two years;  one or both could be exchanged for more fecund substitutes.

They have a good track record: Washington native Tai Shan, born in 2005, headed back to China last year.

This was a big enough deal for President Barack Obama to mention it at an elaborate state dinner at the White House for Chinese President Hu Jintao.

“Today, we’ve shown that our governments can work together, as well, for our mutual benefit,” Obama told the glittering gathering. "And that includes this bit of news: Under a new agreement, our National Zoo will continue to dazzle children and visitors with the beloved giant pandas."

In the United States, panda diplomacy started soon after President Richard Nixon's 1972 trip to China. But the idea that China might be able to export, or at least loan, this cuddly symbol to further diplomatic ends may date back to the Tang Dynasty, when 7th century Chinese Empress Wu Zetian sent a pair of pandas to Japan.

For some reason, Washington has gone disproportionately gaga over pandas. In 2004, the PandaMania exhibition put fancifully painted panda sculptures around town; there's still one near the hotel where the Chinese government set up its press operations for President Hu Jintao's visit. Asked why people in the United States are so smitten, Chinese conservation official Zhang Shanming told reporters it just might be that, when pandas sit on their hind quarters, eating, they look like human babies.

To be honest, Tian Tian and Mei Xiang didn't look so much like babies in that distinctive pose; they looked more like furry beanbags as the big deal was unveiled. But pandas are pandas and Washingtonians are likely to continue the love affair with them.

from Reuters Investigates:

Vietnam’s Capitalist Roaders

A woman dressed in the traditional Vietnamese "ao dai"costume serves tea to Prime Minister Nguyen Tan Dung (front R) during the opening ceremony of the 11th Party Congress in Hanoi January 12, 2011

Vietnam's ruling communists  opened an eight-day party congress on Wednesday with a candid  admission the fast-growing economy had become unstable, as  delegates began the process of reshuffling leaders and  charting new policies.     As leaders sang the national anthem to begin the  five-yearly event, streets in the chilly capital Hanoi were  festooned with red and yellow banners, some bearing the iconic  hammer and sickle. Propaganda posters bore the smiling  likeness of revolutionary leader Ho Chi Minh or of proud,  uniformed workers.     The economic backdrop is less festive. Inflation surged to  a 22-month high in December, the government is struggling to  bring down a hefty fiscal deficit, the currency has been  depreciating for three years and the trade deficit remains  stubbornly high.  

A Reuters Special Report takes a close look at Vietnam's new breed of captitalists, as the country of 90 million takes a page out of China's Communist Party playbook and promotes a more consumption-led economy. This is a development path divergent from that of its East Asian neighbours, whose economies became Tigers or Dragons (as the case may be) on the back of exports not consumers.

In contrast to most emerging markets, Vietnam has been a sell -- up until recently, anyway. The Vietnam stock index is down 59 percent from its March 2007 peak and lost more than 3 percent last year, compared to gains of more than 40 percent in Thailand and Indonesia.

But the situation could reverse this year. The lone ETF tracking the country, Market Vectors Vietnam, has gained 10 percent over the past three months, handily outpacing the iShares NSCI Emerging Markets Index Fund.  

from Pakistan: Now or Never?:

China’s South Asia tour: win-win meets zero sum

Just over a year ago, President Barack Obama suggested during a visit to Beijing that China and the United States could cooperate on bringing stability to Afghanistan and Pakistan.  As I wrote at the time, China — Islamabad’s most loyal partner — was an obvious country to turn to for help in working out how to deal with Pakistan.  Its economy would be the first to gain from greater regional stability which opened up trade routes and improved its access to energy supplies. And it also shared some of Washington’s concerns about Islamist militancy, particularly if this were to spread unrest in its Muslim Xinjiang region.

The big question was whether the suggestion would fall foul of the zero sum game thinking which has bedevilled relations between India, Pakistan and China for nearly 50 years.  India was defeated by China in a border war in 1962 and since then has regarded it as its main military threat. Pakistan has built close ties with China to offset what it sees as its own main military threat from its much larger neighbour India. China in turn has been able to use its relationship with Pakistan to clip India's wings and curb any ambitions it has at regional hegemony.

So where does Obama's suggestion stand now that Chinese Prime Minister Wen Jiabao has just completed a visit to both India and Pakistan?  The answer to that probably depends on how far economics and how far politics determine the behaviour of India and Pakistan in the coming years. China itself is seen as putting its economic interests first, or in the words of the People's Daily, a search for "win-win results consistently dominate China's diplomacy".

In India, Wen offered expanded trade and greater cooperation between two countries which increasingly have reason to align their positions in negotiations within the G-20 economies. That is positive for those whose world view is seen through the lens of economic development --among them Prime Minister Manmohan Singh. In an editorial in The Hindu, Siddharth Varadarajan argues that India needs to stop focusing so much on China as a strategic threat and take advantage of the gains it can reap from Chinese economic growth.  And while expanding trade left India with a $16 billion trade deficit with China in 2007-2008, you can argue that India could still be a long-term beneficiary if rising Chinese wages open up space for cheaper Indian manufacturing.

However, at the same time the two countries apparently failed to make any progress on the political and strategic issues which divide them, among them their disputed border and Chinese support for Pakistan.  That is a worry for those who focus primarily on the strategic, rather than the economic, environment in South Asia -- particularly given that both Beijing and Delhi have become much scratchier about their political disputes in the last few years. 

"During the first visit of a major Chinese leader to India in more than four years, some easing of political tensions should have been accomplished. Instead the two sides decided to kick all contentious issues down the road and expand bilateral trade by two-thirds over the next five years. However, increased trade is no panacea for the sharpening geopolitical rivalry,"  Brahma Chellaney wrote in an op-ed in the Wall Street Journal.

In short, there is no real consensus on what to make of Wen's visit as India grapples with growing Chinese power and tries to decide whether to hitch a ride on the coat tails of China's economic growth or stand up to it.

Perilous predictions for 2011

It’s the season to be merry – and to make forecasts about next year. Across the finance industry fine minds spend December crafting outlooks and extrapolations about how the world will fare, in the hope of a decent return over the next 12 months and avoiding the bear traps that will swallow an investment. The banks, strategic advisories and political risk consultants trumpet their analytical prowess, of course, but are also meeting a natural human need to peer into the future. We all want guidance to take the sting out of living in an uncertain world.

Nowhere is prediction more fraught with peril than in politics and world affairs. The success rate is in inverse proportion to the costs that unexpected acts in the real world can impose on the investor. So despite the difficulty of providing a reliable guide to the future there are huge incentives to try to chart the way ahead. Here’s  Control Risks, a risk consultancy firm, on its view of 2011, while competitor Eurasia reveals in early January, as does the World Economic Forum. Nomura has a list of 10 political challenges to prosperity that range from the prospect of gridlock in US domestic politics to brinksmanship on the Korean peninsula.

So which voices warning of political perils should one heed? There’s a crowded field of commentators, perhaps because political outcomes are not as reducible to numbers as economic indicators, where the industry of forecasting has statistical validity. If you work for a well-known investment bank or strategic studies institute your thoughts carry  institutional gravitas. However, and this is somewhat a statement of the obvious, only a track record of smart forecasting earns you an audience. That, and saying something worthwhile. Worse than getting a prediction wrong is being so blandly vacuous and broad in scope that your forecasts are both right and uninformative.

Respected voices suggest that beyond pointing to areas of dispute and potential tension, political forecasters are attempting the impossible. “The science of prediction is a contradiction in terms,” says Nigel Inkster, a former British intelligence officer who analyses international political risk at the International Institute for Strategic Studies in London. “There are so  many potential variables that could come together in so many potential configurations that it is really difficult to identify anything about which you can be really confident,” says Inkster.

“You can look at the line up of forces and make some broad predictions, for example on the likelihood of trouble around the referendum in Sudan. But so much there depends on decisions not yet taken,” he says, referring to January’s plebiscite where south Sudan may vote to secede. “And when you get into assigning probabilities (to outcomes), that’s not very helpful.”

Reuters tries to gauge political risks with appropriate cautions in mind. We reckon it is possible to use our expertise to diminish surprise and anticipate both dangers and opportunities. How well do we do? Our 2010 outlook focused on sovereign debt default, a hung parliament in Britain and tension between China and the United States. Those were borne out, unlike our prediction that Kevin Rudd would easily be re-elected in Australia. (He was ousted in a party coup in June and his successor Julia Gillard scraped into power). For comparison’s sake look at the 2010 predictions from Eurasia.

from Reuters Investigates:

China’s rebalancing act puts consumer to the fore

Wal-Mart, the world's largest retailer, now has 189 stories in China, according to its website. Soon it will have many more.  The U.S. chain has announced plans to open a series of "compact hypermarkets", using a bare-bones model developed in Latin America, the Financial Times said.

Wal-Mart stores are a bit different than the one's you might find in, say, Little Rock Arkansas. They sell live toads and turtles for one thing, The Economist reported. But they also sell the appliances, gadgets, and housewares that Wal-Mart stores merchandise everywhere.

And business is booming. Third-quarters sales in China soared 15.2 percent from a year earlier, according to the Financial Times story, compared with a paltry 1.4 percent inthe United States.

China's consumption has been growing. Quite fast, in fact. Yet it still acounts for just a third of GDP, compared with around 60 percent in Europe and about 70 percentin the United States. But that is starting to fundamentally change. A Reuters Special Report by Alan Wheatley, "The Chinese Consumer Awakens" notes that wages are rising fast. People are moving into new cities in China's vast interior, and manufacturers and retailers are following them. Call it China's great rebalancing act, as the government tries to promote more consumption and rely less on cheap exports from "the workshop of the world" for future growth.

Timothy Geithner certainly hopes to see this. The U.S. Treasury Secretary is counting on hundreds of millions of Chinese to spend more and save less. That way, Chinese factories would produce more for domestic consumption and less for export, helping to narrow the trade imbalances that are destabilizing the global economy.

Photo caption: Chinese vegetable vendor sleeping in open air market in Changzhi, Shanxi province. REUTERS/stringer

from Afghan Journal:

India, U.S. build ties, with an eye on China

In the end, Pakistan wasn't the unspoken elephant in the room when U.S. President Barack Obama sat down for talks with Indian leaders. Far from tip-toeing around India's Pakistan problem which complicates America's own troubled war there and in Afghanistan, Obama spoke clearly and squarely.

Safe havens for militants in Pakistan wouldn't be tolerated, he said, in what was music to Indian ears. But he also left nobody in doubt Washington wanted India to improve ties with Pakistan, saying New Delhi had the greatest stake in the troubled neighbour's stability.

But the one elephant that the leaders of India and the United States didn't name but which was written all over the flurry of announcements made during the three-day trip was China. Beginning with the headline-grabbing endorsement of India's bid for a permanent place on the U.N. Security Council to maritime cooperation and a surprise partnership to promote food security in Africa, the United States seems to have gone the extra mile to bolster New Delhi's credentials as a global player.

The one country that would be watching this most closely is China where some would see America's deepening ties with India, a continent-size country with a billion-plus people, as aimed at countering its rise.

B.Raman, a  former head of India's Research and Analysis wing, writes that the announcement by India and the United States  to work together for stability in the Indian Ocean region as well as the Pacific  will draw concern in Beijing, which has its own fears of U.S. encirclement.

"Thus, the partnership will seek to promote peace and security across Asia in general and in East and Central Asia in particular, strengthen maritime security and work for a peaceful settlement of maritime disputes. Though China has not been named, Beijing will have reasons to be concerned over the implications of this formulation."