India And China Announce A New Strategic Partnership

I found this gem on Truth Out.

New Delhi – India and China announced a new “strategic partnership” Monday, pledging to resolve long-standing border disputes and boost trade and economic cooperation between two rising powers that together account for more than a third of the world’s population.

The prospect of a more cooperative relationship has significant global implications, given the vast economic potential of India and China and their voracious appetites for energy and other natural resources.

“India and China can together reshape the world order,” Singh said at a ceremony welcoming Wen to India’s presidential palace.

On a practical level, the two governments agreed to a framework for addressing long-standing differences over their 2,175-mile border, promising to resolve the dispute through “peaceful and friendly consultations.” They also signed agreements on trade, economic cooperation, technology sharing, civil aviation and other matters.

As a goodwill gesture, China formally abandoned its claim to the tiny Himalayan province of Sikkim, presenting Indian officials with a map showing the area as part of India. Chinese officials also delighted their hosts by pledging explicitly, and for the first time, to support India’s bid for a permanent seat on the U.N. Security Council, Indian and Chinese officials said.

Between manufacturing and computer hardware in China, services and software in India, this could be a very big deal. Not to mention China’s obvious interest in becoming a major world player politicaly, its huge trade deficit with the U.S., and China purposely under valuing their currency. I think things are going to get interesting in the arena of world affairs. Remember the Ancient Chinese curse; may your life be interesting.

U.S. And China To Hold Regular “senior-level” Talks

President Bush has decided the United States and China should begin holding regular senior-level talks on a range of political, security and possibly economic issues, signifying both China’s interest in the prestige of such sessions and the administration’s efforts to come to grips with China’s rising influence in Asia, senior administration officials said.

Deputy Secretary of State Robert B. Zoellick has been assigned to head the U.S. delegation, and a Chinese vice foreign minister will be his counterpart, officials said. Regular meetings between the two countries have never been held at such a level.

Chinese President Hu Jintao formally asked Bush to consider engaging in what the Chinese call a “strategic dialogue” during an economic meeting in Chile last November. During a visit to Beijing last month, Secretary of State Condoleezza Rice confirmed that the United States is interested in regular senior-level talks, but the administration has chosen to call the meetings a “global dialogue” because, officials say, the phrase “strategic dialogue” is reserved for close U.S. allies.

Undersecretary of Defense Douglas J. Feith, in a speech to the Council on Foreign Relations in February, warned that China was “facing a strategic crossroads” and that “if it wants to continue to prosper, it will choose a benign path that will allow the world to accommodate its rise peacefully.” Otherwise, he said, there would be “a truly gigantic problem in international affairs.”

Jing Quan, a Chinese diplomat who is a visiting fellow at the Brookings Institution, said the talks with the United States would provide “a platform, a basis for the two countries to have direct, frank and deep dialogue.” He said that “through such effective communication, both sides would be in the position to avoid actions and policies that would lead to misunderstandings.”

The story can be read on the Washington post site.

U.S. Opens Challenge to Chinese Textiles

From a story in the Washington Post:

The Bush administration took a giant step yesterday toward imposing new caps on imports of Chinese clothing, responding to complaints that China’s export juggernaut is starting to dominate the worldwide apparel market since the system governing the global industry was changed on Jan. 1.

A U.S. interagency panel said it will initiate proceedings to determine whether new limits should be slapped on imports from China of underwear, cotton trousers, and cotton knit shirts and blouses. In a statement, Commerce Secretary Carlos M. Gutierrez said the administration is committed “to providing assistance to our domestic textile and apparel industry consistent with our international rights and obligations.”

At year-end 2004, a three-decade-old system of quotas on international textile and apparel shipments expired, arousing widespread predictions that China’s enormously efficient and low-cost clothing makers would devastate rival producers once limits were eliminated on individual countries’ shipments.

Under the terms of its entry into the World Trade Organization, Beijing agreed to allow the United States and other nations to impose “safeguard” caps on imports of Chinese textiles and apparel in the event that such imports rose so quickly as to “disrupt” those markets. The safeguards can limit the annual growth in Chinese imports to as little as 7.5 percent, and they can be used until 2008

The U.S. textile industry filed petitions last year seeking safeguards in a number of clothing categories, but those petitions have been tied up in court because they were based only on the potential menace that Chinese imports posed rather than clear evidence of an import surge. In yesterday’s move, the administration “self-initiated” the safeguard process, citing preliminary data released last week that showed very sharp increases in many categories of Chinese imported clothing during the first quarter of 2005. Imports of Chinese-made cotton trousers, for example, soared about 1,500 percent, and imports of cotton knit tops rose 1,250 percent.

Yesterday’s action does not guarantee that new limits will be imposed; it triggers a 30-day period during which interested parties may submit comments, followed by another 60-day period, which can be extended, for the government to determine whether safeguards are warranted. Under the process, however, the government essentially acts as both prosecutor and judge, and textile industry officials said the only real question is how fast the administration will make its decision.

China’s Middle East Policies

From The Middle East Quarterly:

Chinese policy in the Middle East has grown more active over the past decade. With its overriding goal of securing oil and gas to fuel China’s economic growth, the Chinese government has actively cultivated its relations with the oil-rich Middle East, especially Iran and Saudi Arabia. In their dogged pursuit of this goal, Chinese policymakers have been more than willing not only to undercut U.S. nonproliferation efforts but also to work closely with governments that export Islamismâââdespite Beijing’s concerns about China’s own increasingly assertive Uighur Muslim population. Rather than distance itself from these promoters of jihad, the Chinese government has gambled that embracing Iran and Saudi Arabia in lucrative oil and weapons deals will buy it some protection from their export of political Islam.

Qian’s open criticism of a central tenet of Bush administration policy reflects the intensity of Beijing’s concern with Washington’s Middle East strategy, which it sees both as advancing the encirclement of China and creating a norm of regime change against undemocratic states. If the Chinese government perceives that Washington is serious about making democratization the centerpiece of U.S. Middle East policy, Beijing will resist it even more intensely, seeing such a policy as an implicit challenge to the Chinese communist party’s legitimacy at home.

The second event came just days after Bush won reelection, when Chinese foreign minister Li Zhaoxing flew to Tehran to conclude an oil and gas deal between China’s state-owned Sinopec and the Iranian oil ministry worth approximately $100 billion (US) over thirty years.

After the oil deal was signed, Li announced that China would refuse to refer the issue of Iran’s nuclear program to the Security Council. Li’s announcement signified that decades of Sino-Iranian cooperation was bearing fruit for both parties: China would get the oil and gas its economy desperately needs while Iran would finally win the political support of a reliable and weighty friend.

Beijing bet that an open challenge to U.S. policy would not result in any negative repercussionsâââand it won. The fact that the Chinese establishment considers its actions a victory should worry the Bush administration. If Beijing continues to view access to Middle Eastern oil as a zero-sum game and the Middle East as a playing field for great power competition, more direct confrontation between China and the United States will be not the exception but the rule.

The Chinese government’s Middle East policy is a winning gambit for Beijing. China can not only quench its thirst for oil but, at least in the short-term, also undercut external Islamist incitement aimed at its own Muslim population. By cultivating ties with Middle Eastern countries that have antagonistic relations with Washington, Beijing can undermine U.S. policy in the region. The more countries such as the Islamic Republic of Iran, Saudi Arabia, or Syria have ballistic missile capability and weapons of mass destruction, the more difficult it becomes for Washington to intervene in the Middle East in support of U.S. goals or in defense of its allies.

I have often warned that China and Russia was not to be trusted. They have always put their needs and desires over the good of other countries. While it serves their governments purpose to be seen as an ally, they will appear to be an ally. When it no longer serves their purpose?

I encourage you to read the whole article; it is lengthy, but informative.

Government’s Report On Trade Barriers

The government’s 672-page report on trade barriers is designed to guide U.S. negotiators over the next year in their efforts to attack barriers seen as doing the most damage to American companies.

As usual, the report devoted the most coverage – 58 pages – to China. The report provides details of areas where the administration contends the Chinese are not living up to the market-opening promises they made to join the WTO in late 2001.

The report said China was failing to enforce its laws against the theft of American movies, computer software and other intellectual property.

A fact sheet accompanying the report said “epidemic levels” of counterfeiting and piracy in China were causing “serious economic harm to U.S. businesses in virtually every sector of the economy.”

The United States, which had a record trade deficit of $617 billion last year, posted an imbalance of $162 billion with China. That was the largest deficit ever with a single country.

American manufacturers say China’s most harmful trade practice is Beijing’s policy of linking its currency directly to the dollar. This practice has undervalued the yuan by as much as 40 percent, giving Chinese companies a tremendous competitive advantage, according to U.S. businesses.

The 25-nation European Union was singled out for 49 pages of criticism. The report devoted 45 pages to detailing Japan’s trade barriers to U.S. goods, services and investment.

In addition to the European Union, the other trading areas cited in the report were the Arab League and the Southern African Customs Union.

Read more at Forbes.com

Condi rice Visits China

During Condi Riceâââs Visit to china opinions on various topics, including the Taiwan question, Sino-US trade disputes, intellectual property rights protection, Korean Peninsula nuclear stand-off discussions and the World Trade Organization’s Doha Round of market opening talks, were exchanged frankly.

The Taiwan issue is still a tense one. In yesterday’s separate meetings with Rice, both Hu and Wen stressed that the Anti-Secession Law aims to curb “Taiwan independence forces” and the law is conducive to stability and the development of relations between Taiwan and the mainland, and will also help maintain peace and development in the Asia-Pacific region.

Hu also said he hoped the United States would “understand and support all the efforts made by the Chinese government and people to safeguard China’s sovereignty and territorial integrity and realize a peaceful reunification,” and that it would not “send any wrong signal to Taiwan independence secessionist forces.”

Rice replied yesterday that it is in the US interest to maintain tranquility across the Taiwan Straits and solve the Taiwan question peacefully, and that the United States will make efforts to that end. Rice said the US Government’s position on pursuing the one-China policy and abiding by the three US-China joint communiqués will not change, according to a Chinese Foreign Ministry spokesman.

During her meeting with Hu, Rice said the US Government attaches great importance to developing US-China constructive and co-operative ties, and that people around the world are watching the “remarkable transformation” that is going on in China. She said the United States is ready to join hands with China in exploring new fields for co-operation.

The imbalance in trade was also discussed. Wen said economic and trade co-operation is an important part of China-US relations and that the two sides should further improve current bilateral co-ordination mechanisms, based on the principles of equality, mutual benefit and development.

China was also pressured to get Korea back to the bargaining table. China could easily force Korea to disarm. China is the main source of aid to Korea. Threatening to withhold all aid to Korea until they disarm would likely yield immediate results.