Global News Journal

China in pictures: From black and white to colour

By Emma Graham-Harrison

“Long live Chairman Mao Zedong” is scrawled on a thin strip of wood stuck into the ground where a peasant in tattered clothes is urging on a weary-looking ox. Near “Ploughing with Mao” are beautifully composed shots of young, fanatical Red Guards smashing antiques, and another group roughly tormenting a “counter-revolutionary” old man. 

Even though I know they are coming, it is still a shock to move on and see pictures of flawless models lounging on a bench in Beijing, rich young kids drinking in a bar and a group of smiling old women in a technicolour riot of outfits holding pictures of their younger, sterner, revolutionary selves.

The pictures lining the walls of the “China: Portrait of a Country” exhibition are a sharp visual reminder of the changes that have taken place in just one generation, almost unimaginable to those who didn’t live through them, even those like me who have tried to study China and made their home here for years.

In little over three decades, it has gone from an isolated, poor, ideologically rigid backwater to an international powerhouse with the world’s fourth-largest economy.

But there is also a reminder of things that have not changed.

from Pakistan: Now or Never?:

Pakistan, India and the United Nations

Shenzhen: Gateway to China’s roaring economy

By Nick Macfie

I first arrived in Hong Kong in 1982 and stayed, on and off,  for 14 years. One of the most exciting day trips for tourists to the British colony back in those days was to the border, by clattering, non-air-conditioned train and then a short taxi drive to a vantage point, close to the fancy Fanling Golf Club, where you could look across the paddy fields at the stange goings-on in Communist China.

Old Hakka women in their broad-rimmed hats would pester you to buy postcards and Mao badges as you peered by telescope at what was once the tiny fishing village of Shenzhen to watch the villagers in their Mao suits go about their business — leading ducks down narrow paths between the rice fields, or carting vegetables on baskets hung over shoulders on bouncing, bamboo poles. Hong Kong farmers were doing the same thing in the New Territories, but this was fascinating, Communist China!

from Global Investing:

Top Gun economics

It's not often that economists turn their attention to military hardware, but Deutsche Bank has done just that in its latest world outlook. The subject is aircraft carriers and what it sees as the strange desire among a number of countries to build them.

Russia has suggested it may build up to six carriers, DB notes, while China plans one and Britain and France three between them. Like the true economists they are, DB first questions the need, saying such boats are vulnerable, make no sense for coastal defence and are for projecting offensive power over long distances. Then comes the cost:   

"To build a serious aircraft carrier costs well above $5 billion. But then you need to build half a dozen escort vessels and the aircraft to produce a battle unit that will require upwards of 10,000 sailors. Since it is for distant power projection, to keep a single aircraft carrier group on constant deployment requires at least two and more likely three groups."

It reckons China can afford this because it only plans to build one. But Russia, even with a recent surge in wealth, is unlikely to launch a programme soon, it concludes.

Beijing: My home away from home

By Ben Blanchard

I never thought I’d ever go to China. This may not sound strange, except that from the age of 16 I knew I wanted to study Chinese at university.

It was the early 1990s, and memories of what happened around Tiananmen Square a few years ago were still fresh in everybody’s minds.

I’d just read a biography of Chiang Kai-shek, the man who “lost” China to the Communists and was forced to retreat to Taiwan with his rump Nationalist government.

It was not China that fascinated me then, but Taiwan. China was this strange, closed place with apparently no respect for human rights or democracy, while Taiwan was busy lifting martial law and having free and open elections.

from Pakistan: Now or Never?:

The riddle of India, China military exercises

India and China are holding joint troop exercises this weekend in southern India.  As exercises between nations go nowadays these games named “Hand-in Hand 2008" are fairly low level and limited in scope. Certainly not on the scale of the naval, air and ground exercises that India and the United States have embarked upon in recent years.

But this is a difficult time in South Asia following the attacks in Mumbai which New Delhi says were orchestrated from Pakistan and for which it is seeking decisive action. So, for China, - Pakistan’s all weather ally -  to be sending a bunch of  troops to India at this fraught moment is certainly worthy of note, if nothing else.

Obviously the exercises were long-planned and perhaps both sides didn’t want to send a negative signal by calling them off at this stage. Relations between India and China are themselves dogged by deep distrust long after they went to war in 1962 and every move forward or lack of it is closely watched by Indo-Sino watchers.

[Chinese and Indian soldiers at an exercise in 2007. Pic by Reuters/China Daily]

There is even an anti-terrorism element to the exercises. An Indian defence ministry statement said that troops taking part in Hand-in Hand 2008 will carry out tactical manoeuvres and drills interoperability training; and finally “culminating in a joint counter-terrorist operational exercise with simulated enemy.”

In India’s case elements in Pakistan can only be the simulated enemy, especially with the wounds from the Mumbai attacks still raw. The reverse holds true for large sections of Pakistan who have for long felt threatened by India, its bigger neighbour to the east.

from Pakistan: Now or Never?:

Zardari says ready to commit to no first use of nuclear weapons

from Pakistan: Now or Never?:

“Plan C” – Pakistan turns to the IMF.

Pakistan has agreed with the International Monetary Fund (IMF) on a $7.6 billion emergency loan to stave off a balance of payments crisis. 

Shaukat Tarin, economic adviser to the prime minister, said the IMF had endorsed Pakistan's own strategy to bring about structural adjustments. The agreement is expected to encourage other potential donors, who are gathering in Abu Dhabi on Monday for a "Friends of Pakistan" conference.

The government had long delayed announcing its plans to turn to the IMF for help and President Asif Ali Zardari said in September the country did not want to seek IMF assistance. Tarin said in October that going to the IMF was "Plan C" if other lenders failed to come through.  "If we want to go to the IMF, we can ... but only as a backup," he said.

The times are clearly changing and in the midst of a financial crisis that has swept away some of the world's most august financial institutions, there is no shame in admitting a need for help.

For that matter, I can remember former IMF Managing Director Michel Camdessus declaring confidently at one of the annual IMF meetings I covered in Washington in the mid 1990s that Keynsianism was dead. I challenged him at the time over his certainty, but wish I could ask the same question now that western economies are spending their way out of trouble like there's no tomorrow.

But what will it mean for Pakistan that its new government, less than a year after elections that ushered in a new civilian democracy, has had to eat its words and turn to the IMF for help?

Does it bring to Pakistan the silver lining that it offered India, which when forced to accept an IMF bailout in the early 1990s began a programme of economic reforms?  As noted in an earlier post,  India as a result began dismantling decades of licence raj and never really looked back. 

Does crisis give China new opportunity in Africa?

With the West reeling from the financial crisis and pulling back some of its investment in Africa, could China step into the breach and expand its footprint on the continent - a presence that already worries Western powers?

On the face of it, China, which is relatively unscathed by the crisis, has a golden opportunity to exploit Western disarray and increase its financial and political penetration of the continent. Already there are signs that Africans are starting to look away from the West and towards other emerging markets, especially China, as they watch the banking chaos in the traditional capitalist markets.

This could have a lasting impact on Africa’s perceptions of East and West as they see Asian financial structures surviving better than those in Europe and America.

China’s economy is still robust, despite the turmoil elsewhere, with GDP growth this year expected to reach 8.5 to 9 percent. Its thirst for African commodities, especially oil, is unabated to fuel Beijing’s rapid industrialisation drive. Western governments and aid groups accuse Beijing of turning a blind eye to misrule, corruption and human rights abuses as it invests in Africa, including in controversial countries like Sudan, whose Darfur region is suffering a deep humanitarian crisis. But many Africans welcome China’s refusal to interfere in political issues, in contrast to Western attitudes.

Experts say it is questionable whether China has the capacity to get more deeply involved in Africa economically because of its existing huge exposure and the diversification of investment on the continent to include other emerging market countries like Brazil, India and Russia. Not to mention the huge petrodollar funds of Gulf states. They say that in any case economic contagion will reach China which has vital export links with the West. 

But will the spectacle of the Western capitalist system in disarray push African countries to look even more towards the East, finally breaking their strong ties with former colonial powers in Europe and with the United States. What do you think?

U.S. Economic Crisis a Hot Topic on Chinese Blogs

By Oiwan Lam

Thomson Reuters is not responsible for the content of this post – the views are the author’s alone.

According to a New York Times report in early September, the Chinese Central Bank has invested over $1 trillion in U.S. Treasury bills, bonds and debt securities. Of that, $376.3 billion has been put into the mortgage backed securities of Fannie Mae and Freddie Mac, 21% of the Chinese government’s foreign currency reserve.

Whose mistake?

Back in mid-August, Lew Mon-hung, a representative of the Chinese People’s Political Consultative Conference, wrote in several mainstream newspapers in Hong Kong to criticize the investment decision. His opinion has been censored by mainland Chinese mainstream media, but distributed widely on the internet. Chenjian is among one of the mainland bloggers distributing Lew’s viewpoint:

(translated from Chinese)

As a member of the Chinese People’s Political Consultative Conference and with my experience in the finance sector, I am here to question the decision makers at the central government finance sector: you guys are the family’s failure, where do you get the balls to take people’s money to buy such a huge amount of fannie and freddie’s securities. Now they are bankrupted, how are you to take the responsibility?

A nation’s foreign currency reserve is not the net income of the country, when hot money flows out of the country, the reserve will be reduced. That’s why it is important to have safe investment, and it is necessary to diversify the risk. To put more than 20% of our foreign currency reserve on fannie and freddie, is a serious mistake.