That's essentially what The Pentagon said in a story that breaks out to media. USNS Impeccable, the sonar equipped Navy spy-ship was turned away about 75 miles off the coast of Hainan island, and near the Chinese submarine base.
China, in rebuttal, emphasized that the incident happened in Exclusive Economic Zone, which extends 200 nautical miles, or 230 miles, from coastline. In general, ships are free of passage in EEZ, but navy spy-ships certainly raises flags. NYT reports that "The United States and other nations consider the area as lying in international waters. " In fact, it is governed by UNCLOS, which the United States accepted all but Part XI as customary international law, although it hasn't ratified it.
In reality, spy incidents like this happens all the time. Although, the U.S. is probably the only country who thinks it has the right to lay hands on anybody's ass - or spy on toys. It's not clear to me whether it's because the ship finally gets intolerably close to the Chinese, or the Chinese patrols suddenly decides to act like they some backbone after the Russia sinking cargo ship incident. Either way, for the U.S. to protest and claim "oh they laid some woods to block our passage" is pretty amusing.
NYT gets one thing right. It draws some similarity to the spy plane incident. Whether who is the initial provoker, it offers some test for the new President. And I'm guessing the Chinese Navy would be a winner out of this too, since it is hotly debated the need to build a Naval Carrier in China. In incidents like this can possibly sway the support.
Tuesday, March 10, 2009
Look Ma, He doesn't let me spy on his new toy on his curbside
Friday, January 30, 2009
What does Obama want of China?
The evidence of policy stance of the new administration towards China is scarce. The only significant comment comes from Tim Geithner, the Treasury Secretary. In talking about the U.S. economic policy, he says that "strong dollar is in the national interest of the U.S.". However, turning to China, he also says of China "manipulating" its currency value, meaning, RMB needs to appreciate.
Now let's set aside first China's right to "manage" (as the U.S. often did during the 80s) exchange rates. Let's try to decipher what the heck he really means. So, in Geithner's mind, China needs to appreciate currency value against dollar, which is against the national interest of the U.S. Maybe he is being deliberately ambiguous? Not likely, he isn't Fed Chairman. Or he may imply the Dollar needs to be strong against other major currencies, like Euro, but weak against RMB. That would imply that RMB appreciates way more against the Euro, which doesn't seem likely, not to mention trillions of IOU notes U.S. issued to China - and continued Chinese support that needs for the new debt. Of course, in the event of RMB appreciation, it automatically deflates. Therefore, the only consistent interpretation, it seems, is that Dollar needs to be "strong" in order to support the bailout plan, but the U.S. wants to get an upper hand in the "currency manipulation" blame game, so it can pressure China to appreciate RMB and thus alleviate the U.S. debt burden later.
I suspect this would be the central theme in US-China relationship during early part of the administration. It would be very interesting to see how this plays out.
Sunday, November 9, 2008
Here and There
- A trip to grocery store, $68.
A cup of Spanish Latte, $3.80.
Keeping the marriage between men and women? $75 million. - If politicians like an average voter can not be trusted to lead, can you trust voters to pick the right person?
- Taiwan, violence broke out upon Chinese official's visit to negotiate direct trade deals. A CCTV female reporter was also attacked during the "siege". Taiwan may think of itself as a vibrant democracy, it has much to learn from the relative tranquility on American streets where close to half of the people don't agree with the person elected.
If the government should be "by the people, for the people", what if "people" are unruly and violent, happy to take cheap shots, being exploited by politicians in the process?
I'm not sure what exactly people on the Taipei streets wanted to achieve, it seemed like a whole a lot for nothing, but here are some perspectives from the top, take your pick:
Ma Ying-jeou:"Tsai(DDP Chairwoman) was responsible for (instigating) the clashes."
Tsai:"The government that forces people to go into the streets should be held responsible." Hmmm, I'm disappointed in Cornell (where Tsai got JS.) - One way to weather the storm in an economic downterm is to take money from haves to have-nots. Then the economic wheel can keep turning. Fiscal stimulus may be one politically acceptable way to do that. By fiscal expansion, government debt would be later financed by increased taxes, which would be shouldered of larger proportion by high-earners, or if not sufficiently financed, would cause inflation, which would bring savers' real wealth down. Large inflation is as ugly as a recession, so is to be avoided. Therefore, the tax burden is to be shared one way or the other.
While the U.S. congress is contemplating a second stimulus, Chinese government unveils a large stimulus package, featuring mostly State-driven investment project. The success of it depends on who it really benefits - it should be the poor - and how it will be financed later.
Tuesday, September 2, 2008
West Wing Hopefuls
I feel like watching episodes of West Wing. Actually I don't watch a lot of that TV show, but it ought to be more melodramatic than the real thing, or does it?
A young, energetic and eloquent black president-hopeful (move over Morgan Freeman) delivers a forceful speech. A man in well-tailored suit, with pristine hair that rivals the God Father, rises every two minutes, or five syllable, to applaud. His beautiful wife smiles on, trying to catch the applauding action in unison.
If election were to be decided on looks, Democrats had a thundering punch. Even Michele Obama, ever so slightly pouty-mouthed however hard she tries, has a genuine sparkle in her eyes with wifely admiration and motherly love that makes her shine. The republicans after all have only Cindy McCain to hold the court.
Enter Shara Palin.
Pageant score: R2:D1. She not only evens up casting eye-candy-ness on the Republican side, but also ups dramatic scale of the usually blandish party. She is immediately suspected of claiming her daughters baby as her own. Before you know it, her 17-year-old daughter's knocked-up is front page news. She is then questioned from the way she delivered her baby to her high school basketball team uniform. There is even rumor of tape of her daughter getting drunk available. (Do we really need to know?)
If you think paparazzi in Hollywood are sneaky, think again. I doubt West Wing writers have enough imagination to outdo the script either. I'm less convinced of vast policy difference, I just want a good show. But to prevent the show from degenerating to Beverly Hill 90210, I have an idea for future West Wing hopefuls: call Geena Davis.
Thursday, June 19, 2008
Windfall time
It's not autumn yet, but don't tell the Big Oil. The war in Iraq is finally paying some dividends, for some.
Exxon Mobil, Shell, Total and BP — the original partners in the Iraq Petroleum Company — along with Chevron and a number of smaller oil companies, are in talks with Iraq’s Oil Ministry for no-bid contracts to service Iraq’s largest fields, according to ministry officials, oil company officials and an American diplomat.Key words: no-bid, future contract. Western big oil companies regain control over Iraqi oil field, mission accomplished. When will it be reflected in the pump price is another matter. The price: trillions of government spending and a couple thousand young man's life.
In the other news, China raises gas price today by about $0.6 a gallon, bringing it closer to the international price. The wealthy on the coastal regions are sure to complain, but the old price surely wasn't sustainable. In a way, China, given its world manufacturer status, was subsidizing the whole world. What it will entail on the inflation front is interesting to keep eyes on.
Stumble upon: One of the best analysis on China I read recently Related Content of This Rocking Post
Wednesday, June 11, 2008
Let's talk some Economics
I find Economist online, my favorite news magazine is now totally open and free. There's no longer subscriber-only content. But my Nike shoes nevertheless stays about the same price. While we marvel the free contents online, let's not forget they are not actually costless. It's advertising from the likes of Nike and the price I pay for it keep the web world, including this blog service from google, free.
My brother, who was recently visiting the U.S. told me everything here is so cheap. Well, maybe not his eat-out bills. And he was so mad at the Bank of China for balancing out his dollar credit prematurely. That is of cause due to the continuing slide of dollar against most major currencies including RMB. For Americans, the concern is mostly focused on $135 a barrel crude and $4 a gallon gasoline. These things are more related than you probably think, and U.S. and China are trying to sort it out. (You can also be sure that China will be firm on the Darfur issue. Subsidy and not paying for the market price keep the gas price in China at $2.5 a gallon.)
Aside from the often mentioned demand shock from emerging markets like China, at least part of the reason of the expensive oil is the depreciating dollar. It reflects the diminishing purchasing power of the currency. The exchange rate, as they like to say, is fundamentally a "money phenomenon". The fed has issued billions of new dollars just to cover the sub-ordinate market crisis. Over the last eight years, the American economic theme was about spending - tax cuts, financing the war, etc. Here, China is also complicit. In that economic arrangement, China's huge trade surplus against the U.S. partly made the spending and the housing market bubble possible. That may be the reason why the U.S. has never serious take any economic action against China - sanction or tax slap - despite the repeated threat. Under normal circumstances, a country is willing to run continuous surplus this lend money to the other country because it expects the future growth of the foreign country will be higher than its own. However, the expectation never comes to fruition, it turns out to be the housing bubble. Or, should be say it is pushed out to the more distant future? Under the current U.S.-China exchange rate system, the fed is the real central bank, both in the U.S. and China. China running continuous surplus is no different than farmers in Wyoming provide New Yorkers with beef and lend them the sales money for them to play in the stock market.
So, will China or should China continue to appreciate its currency? It's a complicated question to answer. Chinese dollar reserver is at the record high, but exports has already signs of slowing down. And China has huge appetite for growth due to its structural problems. Americans multinationals are not doing too bad amid China growth either. For an extreme example, Chinese banks are said to be among the worst managed banks in the world, so why can Banks of America reap billions of profits from its minority stakes in Chinese banks, big enough to cover its sub-prime loss? The answer can only be growth. If China allows RMB to further appreciate much, the growth will further slow down, and the American debt Chinese own will certainly worth less. (Chinese system is equivalent to letting the government manage all foreign exchanges for you.) The only decent choices for China would then be, like the Japanese used to do, to use the new purchasing power to purchase American assets and American technology, both of which American government is wary of. On the other hand, if China stick mostly to the current peg, it runs the risk of importing inflation, especially form hot money. The advantage of an authoritarian government is that China has the apparatus to control capital flow and limit credits, to a degree. The reverse ratio has been increase several times recently.
So, there's a lot to tango with. My brother will continue to ponder how much he'll lose when he has to convert dollar back to Yuan. And I tell him not to worry too much. At least, it's a better problem to deal with than the $4 gas price. Oh, and don't expect China will hike the gas price dramatically either.
Tuesday, June 3, 2008
Super Over
It's not easy being Hillary. It's difficult to assess the actual policy content by stomp speeches. They are all promises and slogans, and Bush is pounded like a ragdoll left and right. But best speaker goes to Obama. Do you hear he even mentions "this is time...we begin to heal our planet"? Wow. Super over.
Monday, May 12, 2008
How to blame it all on China, a guide
As an intelligent and conscientious man, I offer my service of finding ways to blame on China.
The most followed international news of recent days is cyclone disaster and relief effort in Myanmar. Amid the politics of food aid, it's not surprising that someone will soon find China to be blamed, proclaiming China has Burmese blood on its hands. The fact that China is among the first and largest unconditional aid provider while the U.S., whose aid comes with conditions - as usual, is still all talk be damned.
It's kind getting old though. The term along with the logic has already been used by groups pressuring for the Darfur issue. Some media genius even coined up genocide Olympics, as if calling the Beijing Game this outrageous term would make common Chinese people more sympathetic to their cause and help resolve the situation. The Chinese government, for their part, is sticking with the long standing no-interference policy. So what if China reverses its policy and get hard on Junta? There is a strong possibility that the so-called warm relationship would cool off, and the aids would be denied. sort of the situation the U.S. is in? And then the people would suffer more. There is no easy black and write when it comes to international policies. But I'm afraid the blame-it-on-China crowd would have a hard time understand that.
Nor am I here to defend Chinese policy. The post is to help find creative ways to blame it on China.
One of the most creative activist group is Dream For Darfur, which is solely focused on pressuring China, using upcoming Olympics as the leverage. According to their website, one of the cardinal sin of the Chinese as complicit was threatening the use of veto power unless some language to be modified, upon which the U.S. and France completely give up the motion. You would think, given the same logic and given the organization is based in the U.S., the U.S. and France should be pressured to force the vote first, not to give up over some language. By their inaction, does it make the Americans and French complicit too? But no, China would be a much easier target.
I don't pretend to know all the politics involved around Darfur issue, all the ins and outs, but I do know the focus on pressuring the government side encouraged the rebel leaders in Europe refuse to return to the peace talk. And I do know the most prominent NGO advocate groups' focuses are all, coincidently, gasp, in perfect alignment with the U.S. foreign policy. The current Sudan government is Islamic. Do you know of any well-known Save Somalia groups or groups focused on pressuring Ethiopia, which is sponsored by the U.S. in its invasion of Somalia and caused humanitarian crisis by using some of the same tactics accused of in Darfur?
However, let's not dwell on that. Let me focus on helping. I don't question the passion of folks at Dream for Darfur. I'd like to offer some help at math calculation. For the Chinese government, on one hand it has the Olympics, which will go on, successful or embarrassing; on the other hand it has oil trade that is increasing important to the energy starved China and their long standing non-interference principle. Do the calculation. Now, do you believe the government would cave in because some foreign group want to purposely link the Olympics with an affair as complex as Darfur? From a practical perspective, the donations you folk gather would have provided some relief to the suffering people in Darfur. In stead, they are wasted on garnering media attention, jetting protesters around the globe on the torch rout, flying Mia Farrow to Hong Kong, and possibly even buying some tickets to Olympics events.
However, while we are at blaming it on China, I have a bolder proposal for you. Since many Chinese would like to bring up the war in Iraq in conversation of Durfar - two wrongs don't add up to one right, I agree - why not blame that on China also? It would work. See, the U.S. invasion of Iraq has a $3 trillion price tag, which would not made possible without the Chinese willingly run a huge trade surplus and pump that money back into the American treasury. The American consumers wouldn't be able to continue enjoy their prosperity and cheap Chinese goods with the war going on, which would have increased the pressure to stop the war. China Finances Humanitarian Crisis in Iraq! That would be some catchy headline.
I could have provided more tips on how to blame it on China. (e.g. Blame Hilary's loss on China, her husband's administration has been soft on China, and she has taken on a harder line than Obama's campaign. China contributed to her loss.) But on the second thought I would save them for now and let you exercise on your own.
Peace to the world.
{afterthought}
- Perhaps the difference in attitude towards activist and non-interference is rooted more deeply than people realize. Christian religions has a notion that the whole world is under God and needs to be saved(see missionaries, crusades); while Chinese philosophy is more pragmatic and inward looking(see Confucius).
- Advocate groups vs sovereign nations, or disintegrated international politics, has been an increasing trend in international politics. In a sense, AQ falls into this category too. While it's always remarkable to help advance humanitarian courses, it will be interesting to see how this trend effects national relationships.
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