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The Great Debate

Eyewitness Views: From hope to horror in Tiananmen Square


Eyewitness View: From hope to horror in Tiananmen Square On Changan Avenue, a small crowd confronts the People's Liberation Army (PLA) in Tiananmen Square after the army stormed the square and the surrounding area the night before. This is near the location a day later where "Tank Man" confronted and momentarily halted a column of the army's tanks leaving the square. (Alan Chin)June 4, 1989. In Chinese the reference is usually made with just the numbers “Six Four,” like in English, “9/11.” As the 25th anniversary of the Tiananmen ...

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from Breakingviews:

Russia puts gas-hungry China in a bear hug

By Ethan Bilby
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Russia has signed a long-awaited gas pipeline deal with China, and it leaves the People’s Republic in a bear hug. Russia gets a new market outside the increasingly frosty European Union. Oil major PetroChina gets to balance out some losses from low regulated prices at home. But the optics of the deal shred Beijing’s pretensions to political neutrality.

Russia could use a friend. EU countries have been planning to diversify supply away from dependence on Russia, which provides a third of their energy needs – especially after a dispute in 2009 saw gas cut off. Annexing Ukraine’s southern Crimea region has raised the temperature further. New pipelines from places like Azerbaijan are designed to limit Moscow’s leverage.

from Breakingviews:

Alibaba tries out role of the noble monopolist

By Ethan Bilby

The author is a Reuters Breakingviews columnist.  The opinions expressed are his own.

Alibaba is trying out a new role: the noble monopolist. With an apparent 84 percent share of online consumer goods spending, it effectively owns the country’s Internet shoppers. Its payment affiliate is the biggest game in town. Both are attractions for its upcoming initial public offering. Alibaba’s long-term challenge is to keep showing that dominance helps the market rather than restricts it.

The company isn’t like China’s traditional monopolists. It comes from popularity rather than official handouts or restrictions – unlike, say, tobacco or salt, or the oligopolies that control telecoms and banking. Where “bad” monopolists promote inefficiency, Alibaba has done the opposite, connecting buyers and sellers who would never otherwise meet.

Fires in Vietnam could ultimately burn Beijing

vietnam

The spilling of blood and burning of factories by anti-Chinese rioters sweeping across Vietnam reinforces Beijing’s message to other countries claiming territory in the South China Sea: resistance is costly and ultimately futile.

But a region in which anti-Chinese sentiment grows and where sovereignty disputes disrupt trade and economic growth will burn Beijing as well. Over the long term, a commitment to peaceful dispute resolution in accordance with international law, including some concessions on historic claims, would serve China better than its current path.

China made the provocative first move in this latest incident by deploying a massive oil rig to the contested Paracel Islands. There was no doubt that Vietnam would respond, and China prepared by sending an armada of 80 ships — including seven naval vessels along with the rig. The two countries’ maritime forces are now locked in a standoff with aggressive and dangerous maneuvers, water canons and collisions at sea.

from Breakingviews:

China’s other e-commerce giant is priced to go

By John Foley
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Being second has its advantages. JD.com, China’s number two e-commerce company, has set an indicative range for its initial public offering that values it at around $23 billion. That’s far behind the $100 billion-plus price tag attached to rival Alibaba. But it leaves room for a decent performance.

Next to Alibaba, JD.com is an also-ran. It had 6.8 percent of China’s online shopping market in 2013, while its larger rival had around 84 percent, according to figures from iResearch. Moreover, JD.com loses money because it is investing heavily in logistics to handle delivery of its products. That’s an overhead that Alibaba, which matches buyers and sellers online, doesn’t have to worry about.

from Stories I’d like to see:

Regrouping for Detroit, GM’s bankruptcy evasion and Chinese corporate records

1. Kevyn Orr and a Detroit rebound?

Last Friday, I happened onto a C-Span broadcast of a speech to a national group of bankruptcy lawyers given by Kevyn Orr -- the emergency manager who Michigan Governor Rick Snyder appointed to take over Detroit’s finances and guide the fallen city through bankruptcy. Since I couldn’t stand watching the Yankees get slaughtered by the Los Angeles Angels of Anaheim, I stopped on the Orr speech for a minute. I stayed 45.

I had never seen Orr speak or paid much attention to Detroit’s troubles and his efforts to dig the city out from under. But if his talk -- riveting, funny, emotional, self-effacing, forceful, fact-filled, wholly convincing and seemingly off the cuff -- is any indication, both Orr and Detroit 2014 are big national stories.

They are worthy of coverage beyond the good work that’s been done by, among other local outlets, the Detroit Free Press, which ran this comprehensive story  last month, on the one-year anniversary of Orr leaving a lucrative partnership at the Jones, Day law firm to take on the rescue job.

A three-part plan for Obama’s pivot to Asia

President Obama embarked this week on an eight-day trip to Japan, South Korea, Malaysia and the Philippines. He has tried to reassure the leaders of those countries that his administration is committed to carrying out its signature foreign policy initiative: the rebalance towards the Asia-Pacific.

Obama entered office with the belief that the U.S. had over-invested in the Middle East, particularly in Iraq and Afghanistan. In an October 2011 essay-cum-policy statement, then-Secretary of State Hillary Clinton explained that with the wars in Iraq and Afghanistan winding down, the U.S. should “pivot” to the Asia-Pacific. In January 2012, the Department of Defense formalized her recommendation, announcing that the U.S. would “of necessity rebalance” towards the region.

Since then, however, crises abroad and changes in domestic leadership have tested the effort. With the emergence of a civil war in Syria, the administration faced pressure to rebalance back to the Middle East, or at least give equal priority to the Middle East and the Asia-Pacific.

Obama: Going ‘all in’ for the Asian Century

The reaction in Asia to the dominance of U.S. power is only surpassed by a fear that the United States is in retreat.

As President Barack Obama traveled to Asia Tuesday for a four-country trip, this fear should be foremost on his mind. What many of Asia’s political and cultural leaders  fear most, however, is the United States retreating inward while distracted by crisis after crisis — from Libya to Syria to Crimea. With China on the brink of becoming the world’s largest economy and the geopolitical puzzle pieces of the China seas seemingly in renegotiation, the Eastern world is asking where Washington stands. This is Obama’s moment to demonstrate the components of his much-heralded, but still largely  undefined, tilt to Asia.

The stakes for Obama’s legacy as a world leader — and for the U.S. position as a Pacific power — could not be higher. The president was right to signal a “tilt” in U.S. policy toward Asia. He now has an important opportunity to carry the Asia pivot through to a conclusion.

What Beijing can learn from Wal-Mart

“So, how?”

The question, short for “So, how do you want to handle this?” is a common, subtle way to invite someone to offer you a bribe in Asia. A traffic cop pulls you over for running a yellow light. He’s at your passenger window, a leather strap covering his name tag. He tells you to follow him to the police station so he can process your $100 fine. “So, how?”

If you slip 10 dollars into his ticket book — 20 dollars if you’re a foreigner — he’ll close it, and you’ll both be on your way.

It’s small scale — not like the graft that accompanied China’s high-speed rail system — but it happens all the time in Asia’s developing countries: in traffic, at customs offices, while getting and keeping licenses of all sorts. Nowhere is the bribery problem more severe, and more relevant to the rest of the world, than in China. Three years ago, China’s central bank reported that up to 18,000 officials have fled the country since the 1990s, taking some RMB 800 billion ($128 billion) with them. China lost almost $3 trillion in illicit financial outflows — crooked officials and businesspeople moving their dirty money out of the country — between 2000 and 2009, according to estimates by Global Financial Integrity, a Washington, D.C. financial watchdog. Because China is the world’s largest exporter, bribery in manufacturing and food production — and the related quality control issues — is a global problem.

Putin’s new ‘values pact’

Now that Russia President Vladimir Putin has swallowed Crimea, the question becomes: What if the peninsula doesn’t satisfy his appetite for new Russian territory? What if the only thing that will satiate his hunger for power is the goulash known as eastern Ukraine? Or does he then move on to Moldova, and then on and on?

Indeed, while the world watched the protests in Kiev and the Sochi Olympics last month, the Moldovan territory of Gagauzia quietly held a referendum about whether or not to join Russia if the rest of the country opts for stronger ties to the European Union. Its citizens, just like those in Crimea, have argued that they would be economically better off on Putin’s planet, rather than as meager satellites in the Western solar system.

The prospect of joining Russia, of course, sounds far better on paper than in reality. The promise of benefits is likely to evaporate when robust Western sanctions throw Russia’s economy into a steeper downturn. The ruble has already lost almost 9 percent of its value this year against the dollar. Many have argued (myself included) that very soon Putin won’t be able to survive the international blowback.

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