Almost coinciding with the 13th round of Sino-Indian border talks (New Delhi [ Images ], August 7-8, 2009), an article (in the Chinese language) has appeared in China captioned 'If China takes a little action, the so-called Great Indian Federation can be broken up' (Zhong Guo Zhan Lue Gang, www.iiss.cn, Chinese, August 8, 2009).
Interestingly, it has been reproduced in several other strategic and military Web sites of the country and by all means, targets the domestic audience. The authoritative host site is located in Beijing [ Images ] and is the new edition of one, which so far represented the China International Institute for Strategic Studies (www.chinaiiss.org).
Claiming that Beijing's 'China-Centric' Asian strategy, provides for splitting India, the writer of the article, Zhan Lue (strategy), has found that New Delhi's corresponding 'India-Centric' policy in Asia, is in reality a 'Hindustan centric' one. Stating that on the other hand 'local centres' exist in several of the country's provinces (excepting for the UP and certain northern regions), Zhan Lue has felt that in the face of such local characteristics, the 'so-called' Indian nation cannot be considered as one having existed in history.
According to the article, if India today relies on any thing for unity, it is the Hindu religion. The partition of the country was based on religion. Stating that today nation states are the main current in the world, it has said that India could only be termed now as a 'Hindu religious state'. Adding that Hinduism is a decadent religion as it allows caste exploitation and is unhelpful to the country's modernisation, it described the Indian government as one in a dilemma with regard to eradication of the caste system as it realises that the process to do away with castes may shake the foundation of the consciousness of the Indian nation.
The writer has argued that in view of the above, China in its own interest and the progress of Asia, should join forces with different nationalities like the Assamese, Tamils, and Kashmiris and support the latter in establishing independent nation-States of their own, out of India. In particular, the ULFA (United Liberation Front of Asom) in Assam, a territory neighboring China, can be helped by China so that Assam realises its national independence.
The article has also felt that for Bangladesh, the biggest threat is from India, which wants to develop a great Indian Federation extending from Afghanistan to Myanmar. India is also targeting China with support to Vietnam's efforts to occupy Nansha (Spratly) group of islands in South China Sea.
Hence the need for China's consolidation of its alliance with Bangladesh, a country with which the US and Japan [ Images ] are also improving their relations to counter China.
It has pointed out that China can give political support to Bangladesh enabling the latter to encourage ethnic Bengalis in India to get rid of Indian control and unite with Bangladesh as one Bengali nation; if the same is not possible, creation of at least another free Bengali nation state as a friendly neighbour of Bangladesh, would be desirable, for the purpose of weakening India's expansion and threat aimed at forming a 'unified South Asia'.
The punch line in the article has been that to split India, China can bring into its fold countries like Pakistan, Nepal and Bhutan, support ULFA in attaining its goal for Assam's independence, back aspirations of Indian nationalities like the Tamils and Nagas, encourage Bangladesh to give a push to the independence of West Bengal [ Images ] and lastly recover the 90,000 sq km territory in southern Tibet [ Images ].
Wishing for India's break-up into 20 to 30 nation-States like in Europe, the article has concluded by saying that if the consciousness of nationalities in India could be aroused, social reforms in South Asia can be achieved, the caste system can be eradicated and the region can march along the road of prosperity.
The Chinese article in question will certainly outrage readers in India. Its suggestion that China can follow a strategy to dismember India, a country always with a tradition of unity in diversity, is atrocious, to say the least. The write-up could not have been published without the permission of the Chinese authorities, but it is sure that Beijing will wash its hands out of this if the matter is taken up with it by New Delhi.
It has generally been seen that China is speaking in two voices -- its diplomatic interlocutors have always shown understanding during their dealings with their Indian counterparts, but its selected media is pouring venom on India in their reporting. Which one to believe is a question confronting the public opinion and even policy makers in India.
In any case, an approach of panic towards such outbursts will be a mistake, but also ignoring them will prove to be costly for India.
D S Rajan, is Director, Chennai Centre for China Studies.
Showing posts with label China. Show all posts
Showing posts with label China. Show all posts
Saturday, August 15, 2009
Sunday, March 29, 2009
UN calls for a new global currency
A United Nations panel of economists has proposed a new global currency reserve that would take over the US dollar-based system used for decades by international banks.
The proposal comes on the heels of the controversial call by China's central bank governor, Zhou Xiaochuan, to create a new world currency reserve to replace the US dollar as part of a sweeping overhaul of global finance, which is suffering its worst crisis since the Great Depression of the 1930s.
China and many developing countries blame the crisis on US mishandling of overextended mortgage loans and investments in them.
"A new global reserve system... with regular or cyclically adjusted emissions calibrated to the size of reserve accumulations, could contribute to global stability, economic strength and global equity," the panel said in a document released in New York.
The call was issued at the end of a three-day conference at UN headquarters in New York on Friday.
Earlier this week, the US said it was open to enlarging the International Monetary Fund's (IMF) currency reserves, but insisted the dollar would remain "the world's dominant reserve currency".
The call comes just days before the world's 20 largest economies (G20) were to meet in London to chart a way out of the global recession.
The UN panel said a new global reserve would be "feasible, non- inflationary and could be easily implemented". It said it would help lessen the difficulties now caused by unbalanced adjustments between surplus and deficit countries.
The 22-member panel is headed by Nobel Economics Prize laureate Joseph Stiglitz, a frequent critic of past US fiscal policy.
"The nature of this crisis has opened up opportunities for change that I think would not have been conceivable even a few months ago," Stiglitz said on Thursday.
The panel made several recommendations to deal with the financial crisis, which it said requires the cooperation of rich and poor nations together to take strong and effective actions to stimulate their economies.
Stiglitz said there has been a growing consensus among UN members that the US dollar-based financial system is problematic. But he warned that the idea of a new global reserve is still a concept that panelists are debating.
He said the current system was "relatively volatile, deflationary, unstable and (had) inequity associated with it".
"Developing countries are lending the United States trillions dollars at almost zero interest rates when they have huge needs themselves," Stiglitz said. "It's indicative of the nature of the problem. It's a net transfer, in a sense, to the US, a form of foreign aid."
The panel, known as the Commission of Experts on Reform of International Finance and Economic Structures, was established by the UN General Assembly last year to deal with the widening economic and financial crisis.
The panel believes the creation of a new global reserve would help poor countries through an improved credit system, built on a system of special drawing rights (SDRs) set up by the International Monetary Fund after World War II.
China's call for a replacement of the US dollar has made the UN proposal for a new currency reserve stronger. Some panelists suggested the SDRs could be used as a new standard of a global reserve currency.
The proposal comes on the heels of the controversial call by China's central bank governor, Zhou Xiaochuan, to create a new world currency reserve to replace the US dollar as part of a sweeping overhaul of global finance, which is suffering its worst crisis since the Great Depression of the 1930s.
China and many developing countries blame the crisis on US mishandling of overextended mortgage loans and investments in them.
"A new global reserve system... with regular or cyclically adjusted emissions calibrated to the size of reserve accumulations, could contribute to global stability, economic strength and global equity," the panel said in a document released in New York.
The call was issued at the end of a three-day conference at UN headquarters in New York on Friday.
Earlier this week, the US said it was open to enlarging the International Monetary Fund's (IMF) currency reserves, but insisted the dollar would remain "the world's dominant reserve currency".
The call comes just days before the world's 20 largest economies (G20) were to meet in London to chart a way out of the global recession.
The UN panel said a new global reserve would be "feasible, non- inflationary and could be easily implemented". It said it would help lessen the difficulties now caused by unbalanced adjustments between surplus and deficit countries.
The 22-member panel is headed by Nobel Economics Prize laureate Joseph Stiglitz, a frequent critic of past US fiscal policy.
"The nature of this crisis has opened up opportunities for change that I think would not have been conceivable even a few months ago," Stiglitz said on Thursday.
The panel made several recommendations to deal with the financial crisis, which it said requires the cooperation of rich and poor nations together to take strong and effective actions to stimulate their economies.
Stiglitz said there has been a growing consensus among UN members that the US dollar-based financial system is problematic. But he warned that the idea of a new global reserve is still a concept that panelists are debating.
He said the current system was "relatively volatile, deflationary, unstable and (had) inequity associated with it".
"Developing countries are lending the United States trillions dollars at almost zero interest rates when they have huge needs themselves," Stiglitz said. "It's indicative of the nature of the problem. It's a net transfer, in a sense, to the US, a form of foreign aid."
The panel, known as the Commission of Experts on Reform of International Finance and Economic Structures, was established by the UN General Assembly last year to deal with the widening economic and financial crisis.
The panel believes the creation of a new global reserve would help poor countries through an improved credit system, built on a system of special drawing rights (SDRs) set up by the International Monetary Fund after World War II.
China's call for a replacement of the US dollar has made the UN proposal for a new currency reserve stronger. Some panelists suggested the SDRs could be used as a new standard of a global reserve currency.
China Calls for a New Global Currency to Replace Dollar
China calls for new global currency
BEIJING (AP) — China is calling for a new global currency controlled by the International Monetary Fund, stepping up pressure ahead of a London summit of global leaders for changes to a financial system dominated by the U.S. dollar and Western governments.
The comments, in an essay by the Chinese central bank governor released late Monday, reflect Beijing's growing assertiveness in economic affairs. China is expected to press for developing countries to have a bigger say in finance when leaders of the Group of 20 major economies meet April 2 in London to discuss the global crisis.
Gov. Zhou Xiaochuan's essay did not mention the dollar by name but said the crisis showed the dangers of relying on one nation's currency for international payments. In an unusual step, the essay was published in both Chinese and English, making clear it was meant for an international audience.
"The crisis called again for creative reform of the existing international monetary system towards an international reserve currency," Zhou wrote.
A reserve currency is the unit in which a government holds its reserves. But Zhou said the proposed new currency also should be used for trade, investment, pricing commodities and corporate bookkeeping.
Beijing has long been uneasy about relying on the dollar for the bulk of its trade and to store foreign reserves. Premier Wen Jiabao publicly appealed to Washington this month to avoid any steps in response to the crisis that might erode the value of the dollar and Beijing's estimated $1 trillion holdings in Treasuries and other U.S. government debt.
The currency should be based on shares in the IMF held by its 185 member nations, known as special drawing rights, or SDRs, the essay said. The Washington-based IMF advises governments on economic policy and lends money to help with balance-of-payments problems.
Some economists have suggested creating a new reserve currency to reduce reliance on the dollar but acknowledge it would face major obstacles. It would require acceptance from nations that have long used the dollar and hold huge stockpiles of the U.S. currency.
"There has been for decades talk about creating an international reserve currency and it has never really progressed," said Michael Pettis, a finance professor at Peking University's Guanghua School of Management.
Managing such a currency would require balancing the contradictory needs of countries with high and low growth or with trade surpluses or deficits, Pettis said. He said the 16 European nations that use the euro have faced "huge difficulties" in managing monetary policy even though their economies are similar.
"It's hard for me to imagine how it's going to be easier for the world to have a common currency for trade," he said.
China has pressed for changes to give developing countries more influence in the IMF, the World Bank and other finance bodies. G20 finance officials issued a statement at their last meeting calling for such changes but gave no details of how that might happen.
Russia also has called for such reforms and says it will press its case at the London summit.
Zhou said the new currency would let governments manage their economies more efficiently because its value would not be influenced by any one nation's need to regulate its own finance and trade.
"A super-sovereign reserve currency managed by a global institution could be used to both create and control global liquidity," Zhou wrote. "This will significantly reduce the risks of a future crisis and enhance crisis management capability."
Zhou also called for changing how SDRs are valued. Currently, they are based on the value of four currencies — the dollar, euro, yen and British pound.
"The basket of currencies forming the basis for SDR valuation should be expanded to include currencies of all major economies," Zhou wrote. "The allocation of the SDR can be shifted from a purely calculation-based system to one backed by real assets, such as a reserve pool, to further boost market confidence in its value."
BEIJING (AP) — China is calling for a new global currency controlled by the International Monetary Fund, stepping up pressure ahead of a London summit of global leaders for changes to a financial system dominated by the U.S. dollar and Western governments.
The comments, in an essay by the Chinese central bank governor released late Monday, reflect Beijing's growing assertiveness in economic affairs. China is expected to press for developing countries to have a bigger say in finance when leaders of the Group of 20 major economies meet April 2 in London to discuss the global crisis.
Gov. Zhou Xiaochuan's essay did not mention the dollar by name but said the crisis showed the dangers of relying on one nation's currency for international payments. In an unusual step, the essay was published in both Chinese and English, making clear it was meant for an international audience.
"The crisis called again for creative reform of the existing international monetary system towards an international reserve currency," Zhou wrote.
A reserve currency is the unit in which a government holds its reserves. But Zhou said the proposed new currency also should be used for trade, investment, pricing commodities and corporate bookkeeping.
Beijing has long been uneasy about relying on the dollar for the bulk of its trade and to store foreign reserves. Premier Wen Jiabao publicly appealed to Washington this month to avoid any steps in response to the crisis that might erode the value of the dollar and Beijing's estimated $1 trillion holdings in Treasuries and other U.S. government debt.
The currency should be based on shares in the IMF held by its 185 member nations, known as special drawing rights, or SDRs, the essay said. The Washington-based IMF advises governments on economic policy and lends money to help with balance-of-payments problems.
Some economists have suggested creating a new reserve currency to reduce reliance on the dollar but acknowledge it would face major obstacles. It would require acceptance from nations that have long used the dollar and hold huge stockpiles of the U.S. currency.
"There has been for decades talk about creating an international reserve currency and it has never really progressed," said Michael Pettis, a finance professor at Peking University's Guanghua School of Management.
Managing such a currency would require balancing the contradictory needs of countries with high and low growth or with trade surpluses or deficits, Pettis said. He said the 16 European nations that use the euro have faced "huge difficulties" in managing monetary policy even though their economies are similar.
"It's hard for me to imagine how it's going to be easier for the world to have a common currency for trade," he said.
China has pressed for changes to give developing countries more influence in the IMF, the World Bank and other finance bodies. G20 finance officials issued a statement at their last meeting calling for such changes but gave no details of how that might happen.
Russia also has called for such reforms and says it will press its case at the London summit.
Zhou said the new currency would let governments manage their economies more efficiently because its value would not be influenced by any one nation's need to regulate its own finance and trade.
"A super-sovereign reserve currency managed by a global institution could be used to both create and control global liquidity," Zhou wrote. "This will significantly reduce the risks of a future crisis and enhance crisis management capability."
Zhou also called for changing how SDRs are valued. Currently, they are based on the value of four currencies — the dollar, euro, yen and British pound.
"The basket of currencies forming the basis for SDR valuation should be expanded to include currencies of all major economies," Zhou wrote. "The allocation of the SDR can be shifted from a purely calculation-based system to one backed by real assets, such as a reserve pool, to further boost market confidence in its value."
Obama Cuts Cost to Face India, China
Washington: President Barack Obama wants to reduce health care and energy costs to lessen the massive national debt lest India and China overtake a recession hit US economy."We're doing everything we can to reduce that deficit," Obama said addressing his second prime time news conference Tuesday night.
A fiscal deficit of over $1.3 trillion left by the Bush administration is expected to double with the stimulus measures to rescue the economy.
But it's hard to do so "because we've accumulated a structural deficit that's going to take a long time, and we're not going to be able to do it next year or the year after or three years from now. What we have to do is bend the curve on these deficit projections," Obama said."And the best way for us to do that is to reduce health care costs," he said suggesting investment in health information technologies and preventive care. "Let's do a whole host of things, some of which cost money on the front end, but offer the prospect of reducing costs on the back end."
Now, the alternative is to stand pat and to simply say: We are just going to not invest in health care. We're not going to take on energy. We'll wait until the next time that gas gets to $4 a gallon. We will not improve our schools."And we'll allow China or India or other countries to lap our young people in terms of their performance. We will settle on lower growth rates, and we will continue to contract, both as an economy and our ability to provide a better life for our kids,"
Obama said.Asked about a Chinese proposal to replace the US dollar as the reserve currency with a new global currency run with a different standard by the International Monetary Fund, he said: "I don't believe that there's a need for a global currency.""The dollar is extraordinarily strong right now," Obama said, "and the reason the dollar is strong right now is because investors consider the United States the strongest economy in the world with the most stable political system in the world."
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