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Friday, April 28, 2006

US, Communist China, India, and Wang Wenyi

China home trouble sways US to India

by Indira Kannan

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Communist China may be a risk? Do you suppose that foreign investors got the hint from Wang Wenyi's bold appeal? It is clear that the current state of unrest in China certainly will have repercussions on their economy sooner than later; Bremmer expands on that situation below. Before we get to that...did you ever think that foreign investments might fuel the ongoing persecutions in Communist China? According to a WOIPFG report, the answer is yes. J. Podhoretz and Chris Brown offer some good insights on this topic as follows

A fine protest; will Wenyi Wang’s Words work?

New York Post: 21 April 2006 - China presents a peculiarly difficult challenge for the United States. On the one hand, the government's decision to liberalize its economy offers hope that this most populous nation on earth cannot long remain even partially shackled. On the other hand, it uses its growing economic power to strengthen its hold on its people.

So do we accelerate our business interests in China because, in part, that will accelerate its journey toward liberal democracy? Or are Western businesses inadvertently contributing to the power of the regime?

Do we seek a closer relationship with China? Or do we need to keep more than an arm's length so that we don't serve the interests of a system we want to see replaced as soon as is practicable - replaced because no regime that treats Falun Gong meditation as a crime against the state should survive and thrive?

These are questions that must be asked, and addressed. The great virtue of Wenyi Wang's protest was not only that it caused Hu some discomfort, but that it will provoke Americans to discuss them, and to pay heed to China's crimes even as we welcome China's freer economy. (full report)

Trade Won't Change China by Chris Brown

Front Page Mag (2005) - Trade with China has and will continue to be one-sided, resulting in the constant transfer of wealth to the government of China. This wealth has funded their military build-up, which is particularly focused on ballistic missiles and anti-carrier warfare that one day may be used against the United States or our allies. China has labeled the United States an enemy and declared our existing treaties and security relationships in the Asia Pacific regions to be infringements upon its sovereignty.

For those last true believers in "economic determinism," perhaps they need to consider the political situation within the oil rich nations of the Middle East. Both China and these nations are held up economically by the inflow of wealth from Western nations. This wealth goes to support the oligarchical regimes in both regions. Just as oil wealth has not empowered the people of the Middle East, the wealth from trade and economic assistance seems unlikely to bring democracy to China. Just as the benefits of the wealth from oil is limited to the ruling elites, so too the wealth gained by the Chinese goes to the Communist leadership and their friends, who continue to maintain their own power and position at the expense of the people's freedom and human dignity. (full report)

China home trouble sways US to India

New York (CNN-IBN) 25 April 2006 : China has seen a deluge of US investment and imports ever since it opened up its economy and has used this economic leverage to sideline political objections over lack of freedom or rampant piracy within the country.

But now, with questions emerging over China’s internal tensions, many US investors are eyeing its more stable, democratic neighbour – that’s India.

And with President Hu’s recent visit to the US failing to produce any breakthroughs, this could be an opportunity for Indian business to make itself heard.

Chinese President Hu Jintao’s eventful reception at the White House last week, disrupted by a Falun Gong activist, was an indication of the internal political and social challenges facing the country.

And the American approach to the ceremony was in stark contrast to the state visit protocol extended to Prime Minister Manmohan Singh last year. The Bush administration is believed to be cultivating India in order to contain the growing influence of China outside its borders.

According to experts like Ian Bremmer – President, Eurasia Group, the head of a leading risk advisory firm, American businesses are doing the same, because they are nervous about what’s happening inside China’s borders.

Bremmer says, “There is a big question about to what extent the Chinese political system as it presently exists is sustainable for 5, 10, 15 years. If you are a major automotive manufacturer, telecommunications manufacturer and you are not just talking about selling white goods in China or India, you are talking about setting up shop, putting hundreds of millions of dollars, billions of dollars in the country that you can’t get out tomorrow or in a month, then China represents a growing risk for you and there is no question that those companies are starting to take a more serious look at India and at countries throughout south and south-east Asia as their own hedging strategies. “

China still has tremendous economic leverage with the US. China enjoyed a trade surplus of over $200 billion over the US last year. China is also America’s fastest growing export market, and is the second largest buyer of US treasury bonds.

But as observers point out, crucial disputes remain over issues like the lack of Intellectual Property Rights and the undervalued Chinese Yuan, as well as China's relationship with countries like Iran, Sudan and Venezuela.

The recent summit between President Bush and President Hu failed to make progress on political or economic differences between the two countries. And American industry is also apprehensive about anticipated measures by the Chinese government to strengthen domestic businesses against foreign investors.

This could be a window of opportunity for Indian industry to highlight its advantages and attract more American investment.

Advantage China:

· Trade surplus over US in 2005: $201.7 bn

· Fastest growing export market for the US

· Holds $265.2 bn in US Treasury securities (as of February 2006)

Related Articles:

If China is Asia's hare, India is its tortoise in race that may surprise

Communist China and India: They are not the same

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