Hong Kong: China’s central bank has made a surprise cut to the amount of money that banks must keep in reserve, in an effort to keep money flowing through the financial system and prop up the economy, media reports said.
The People’s Bank of China (PBOC) said it would cut the reserve requirement ratio (RRR) for almost all banks by 0.25 percentage points, effective March 27, CNN reported.
“(We must) make a good combination of macro policies, better serve the real economy, and maintain reasonable and sufficient liquidity in the banking system,” the PBOC said in a statement.
The late Friday move came as a surprise and follows a week of turmoil in global financial markets triggered by the failure of some regional US banks.
As recently as Wednesday, analysts from Goldman Sachs said they were expecting the PBOC to keep interest rates and the RRR “unchanged” through the first half of 2023, CNN reported.
The central bank had already injected hundreds of billions of yuan into the banking system since January, mainly through a medium-term lending facility, the analysts said.
The rapid collapse of the two US banks and troubles at Credit Suisse have stoked fears about the health of the global banking sector.
Regulators on both sides of the Atlantic have taken emergency measures since Sunday to provide liquidity support to troubled lenders and shore up the confidence in the banking system. On Thursday, a group of America’s largest banks stepped in to rescue First Republic Bank with a $30 billion lifeline, CNN reported.
Earlier this month, Yi Gang, Governor of the PBOC, hinted at a news conference that monetary policy this year will be largely stable.
“The current level of real interest rates is relatively appropriate,” he said.
Russian entities also received 12 shipments of drone parts by Chinese companies and over 12 tons of Chinese body armor, routed via Turkey, in late 2022, according to the data.
Although the customs data does not show that Beijing is selling a large amount of weapons to Moscow specifically to aid its war effort, it reveals that China is supplying Russian companies with previously unreported “dual-use” equipment — commercial items that could also be used on the battlefield in Ukraine.
It is the first confirmation that China is sending rifles and body armor to Russian companies, and shows that drones and drone parts are still being sent despite promises from at least one company that said it would suspend business in Russia and Ukraine to ensure its products did not aid the war effort.
The confirmation of these shipments comes as leaders in the U.S. and Europe warn Beijing against supporting Russia’s efforts in Ukraine. Western officials have said in recent weeks that China is considering sending weapons to Russia’s military, a move that could alter the nature of the fighting on the ground in Ukraine, tipping it in Russia’s favor. Officials are also concerned that some of the dual-use material could also be used by Russia to equip reinforcements being deployed to Ukraine at a time when Moscow is in desperate need of supplies.
Da-Jiang Innovations Science & Technology Co., also known as DJI, sent drone parts — like batteries and cameras — via the United Arab Emirates to a small Russian distributor in November and December 2022. DJI is a Chinese company that has been under U.S. Treasury sanctions since 2021 for providing the Chinese state with drones to surveil the Uyghur minority in the western region of Xinjiang.
In addition to drones, Russia has for months relied on other countries, including China, for navigation equipment, satellite imagery, vehicle components and other raw materials to help prop up President Vladimir Putin’s year-old war on Ukraine.
It’s currently unclear if Russia is using any of the rifles included in the shipment data on the battlefield — Tekhkrim, the Russian company, did not respond to an emailed request for comment. But the DJI drones have been spotted on the battlefield for months. DJI did not immediately respond to a request for comment.
The National Security Council did not comment on the record for this story. The Chinese embassy in Washington said in a statement that Beijing is “committed to promoting talks for peace” in Ukraine.
“China did not create the crisis. It is not a party to the crisis, and has not provided weapons to either side of the conflict,” said embassy spokesperson Liu Pengyu.
Asked about the findings in the data obtained by POLITICO, Poland’s Ambassador to the EU Andrzej Sadoś said that “due to the potential very serious consequences, such information should be verified immediately.”
Although Western sanctions have hampered Moscow’s ability to import everything from microchips to tear gas, Russia’s still able to buy supplies that support its war effort from “friendly” countries that aren’t following the West’s new rules, like China or the Gulf countries.
“Some commercial products, like drones or even microchips, could be adapted. They can transform from a simple benign civilian product to a lethal and military product,” said Sam Bendett, an adjunct senior fellow at the Center of Naval Analyses Russia Studies in Washington, noting that dual-use items could help Russia advance on the battlefield.
Experts say it is difficult to track whether dual-use items shipped from China are being sold to buyers who intend to use the technology for civilian purposes or for military means.
“The challenge with dual-use items is that the export control system we have has to consider both the commercial sales possibilities as well as the military use of certain items,” said Zach Cooper, former assistant to the deputy national security adviser for combating terrorism at the National Security Council.
In cases where the Kremlin craves specific technology only produced in say the U.S., EU or Japan, there are wily ways for Moscow to evade sanctions, which include buying equipment from middlemen located in countries with cordial trade relations with both the West and Russia.
Russia managed to import almost 80 tons of body armor worth around $10 million in December last year, according to the customs data from Import Genius. Those bulletproof vests were manufactured by Turkish company Ariteks and most were imported straight from Turkey, although some of the shipments arrived to Russia via the United Arab Emirates. Russia also imported some body armor from Chinese company Xinxing Guangzhou Import & Export Co.
Trade data also shows that Russian state defense company Rosoboronexport has imported microchips, thermal vision devices and spare parts like a gas turbine engine from a variety of countries ranging from China to Serbia and Myanmar since 2022.
Dual-use items could also be a way for China to quietly increase its assistance to Moscow while avoiding reprisals officials in Washington and Europe have been threatening in recent weeks if China goes ahead with sending weapons to the Russian military.
Most recently, German Chancellor Olaf Scholz told reporters last week that there would be “consequences” if China sent weapons to Russia, although he also said that he’s seen “no evidence” that Beijing is considering delivering arms to Moscow.
“We are now in a stage where we are making clear that this should not happen, and I’m relatively optimistic that we will be successful with our request in this case,” he said.
Among the military items China has been considering shipping to Russia are drones, ammunition and other small arms, according to a list that has circulated inside the administration and on Capitol Hill for months, according to a person who read that document. And intelligence briefed to officials in Washington, on Capitol Hill and to U.S. allies across the world in the last month, suggests Beijing could take the step to ship weapons to Russia.
“We do see [China] providing assistance to Russia in the context of the conflict. And we see them in a situation in which they’ve become increasingly uncomfortable about the level of assistance and not looking to do it as publicly as might otherwise occur and given the reputational costs associated with it,” Avril Haines, the U.S. director of national intelligence, said in a congressional hearing March 8. “That is a very real concern and the degree of how close they get and how much assistance they’re providing is something we watch very carefully.”
As data about dual-use item shipments to Russia becomes available, Western countries are expected to ramp up efforts to quell these flows.
“We’ve already started to see sanctions against people [moving] military material to Russia. I’m sure we’re going to be seeing the EU and other countries target those people that are helping a lot of this material to get to Russia,” said James Byrne from the Royal United Services Institute, a U.K.-based defense think tank.
Beijing continues to deny that it is ramping up support for Russia in Ukraine. However, several of its top officials have recently traveled to Moscow. President Xi Jinping is expected to make an appearance there in the coming weeks. China recently presented a 12-point peace proposal for the war in Ukraine, though it was criticized by western leaders for its ambiguity and for its lack of details about the need for the withdrawal of Russian troops.
Leonie Kijewski contributed reporting from Brussels.
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( With inputs from : www.politico.com )
Chinese President Xi Jinping will pay a three-day visit to his Russian counterpart Vladimir Putin next week, Beijing and Moscow announced Friday, with “strategic cooperation” on the agenda.
“On March 20-22, 2023, at the invitation of Vladimir Putin, president of the People’s Republic of China Xi Jinping will pay a state visit to Russia,” the Kremlin’s press service said in a statement.
“A number of important bilateral documents will be signed,” the statement reads.
Neither country confirmed previous reports from the Wall Street Journal that Xi would use the opportunity to call Ukrainian President Volodymyr Zelenskyy — in what would be the first communication between the two leaders since Russia launched its full-scale invasion of Ukraine last February.
While China was initially committed to a “no-limit partnership” passed with Moscow days before the beginning of the war in Ukraine, Beijing has since sought to position itself as a peace broker, introducing a 12-point plan for peace.
Yet, Beijing’s attempts have drawn criticism from Western leaders. China, they said, is anything but neutral in the war, and thus not a good fit to be playing the arbiter.
China has been accused by the U.S. of delivering non-lethal “support” to Russia — and, according to exclusive customs data obtained by POLITICO, Chinese companies shipped more than 1,000 assault rifles, drone parts and body armor to Russian entities between June and December of last year.
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( With inputs from : www.politico.eu )
Germany and Japan agreed on Saturday to strengthen cooperation on economic security in the aftermath of tensions over global supply chains and the economic impact of the war in Ukraine.
In the first high-ministerial government consultations held between the two countries, German Chancellor Olaf Scholz reached out to Tokyo to seek to reduce Germany’s dependence on China for imports of raw materials.
“The current challenges of our time make it clear: It is important to expand cooperation with close partners and acquire new partners. We want to reduce dependencies and increase the resilience of our economies.” the German chancellor said in a tweet.
Scholz and Japanese Prime Minister Fumio Kishida said they believe the agreement will allow both countries to diversify value chains in order to be able to reduce economic risks.
In a joint statement, the two countries said they will work on establishing “a legal framework for bilateral defense and security cooperation activities,” including ways to protect critical infrastructures, trade routes and to secure future supply of sustainable energy.
Germany’s decision to prioritize consultations with Japan came after the Asian country put forward an economic security bill last year aimed at securing the uptake of technology and bolstering critical supply chains.
Japan is Germany’s second-largest trading partner in Asia after China, with a bilateral trade volume of €45.7 billion mainly based on the import and export of machinery, vehicles, electronics and chemical products.
The two leaders also exchanged views on the situation in Ukraine, cooperation in the Indo-Pacific region and the G7 meeting in Hiroshima scheduled for May.
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( With inputs from : www.politico.eu )
As he jets off for a state visit to Moscow this week, China’s President Xi Jinping is doing so in defiance of massive international pressure. Vladimir Putin, the man Xi once called his “best, most intimate friend,” has just become the world’s most wanted alleged war criminal.
The International Criminal Court issued an arrest warrant for Putin on March 17 for his alleged role in illegally transferring Ukrainian civilians into Russian territories. But that isn’t deterring Xi, who broke Communist Party norms and formally secured a third term as Chinese leader this month.
But why is China’s leader so determined to stand by Putin despite the inevitable backlash, at a time when the West is increasingly suspicious of Beijing’s military aims — and scrutinizing prized Chinese companies like TikTok — more closely than ever?
For a start, Beijing’s worldview requires it to stay strategically close to Russia: As Beijing’s leaders see it, the U.S. is blocking China’s path to global leadership, aided by European governments, while most of its own geographical neighbors — from Japan and South Korea to Vietnam and India — are increasingly skeptical rather than supportive.
“The Chinese people are not prone to threats. Paper tigers such as the U.S. would definitely not be able to threaten China,” declared a commentary on Chinese state news agency Xinhua previewing Xi’s trip to Russia. The same article slammed Washington for threatening to sanction China if it provided Russia with weapons for its invasion of Ukraine. “The more the U.S. wants to crush the two superpowers, China and Russia, together … the closer China and Russia lean on each other.”
It’s a view that chimes with the rhetoric from the Kremlin. “Washington does not want this war to end. Washington wants and is doing everything to continue this war. This is the visible hand,” Putin’s spokesman Dmitry Peskov said earlier this month.
10-year bromance
To understand Xi’s preference for Putin even though China’s economy is so intertwined with the West, analysts say it’s not just important to factor in Beijing’s vision for the future, but also to grasp the history that the Chinese and Russian leaders share.
“They’re just six months apart in terms of age. Their fathers both fought in World War II … Both men had hardships in their youths. Both have daughters,” said Alexander Gabuev, a senior fellow at the Carnegie Endowment for International Peace think tank and an expert on Russo-Chinese relations. “And they are both increasingly like an emperor and a tsar, equally obsessed with Color Revolutions.”
Their “bromance,” as Gabuev put it, began in 2013 when Xi met Putin toward the end of the Asia-Pacific Economic Cooperation summit in Bali — on Putin’s birthday. Citing two people present at the impromptu birthday party, Gabuev said the occasion was “not a boozy night, but they opened up and there was a really functioning chemistry.”
Russian President Vladimir Putin with Chinese President Xi Jinping on the sidelines of the Asia-Pacific Economic Cooperation Summit in Nusa Dua in 2013 | Mast Irham/AFP via Getty Images
According to Putin himself, Xi presented him with a cake while the Russian leader pulled out a bottle of vodka for a toast. The pair then reminisced over shots and sandwiches. “I’ve never established such relations or made such arrangements with any other foreign colleague, but I did it with President Xi,” Putin told the Chinese CCTV broadcaster in 2018. “This might seem irrelevant, but to talk about President Xi, this is where I would like to start.”
Those remarks were followed by a trip to Beijing, where Xi presented Putin with China’s first friendship medal. “He is my best, most intimate friend,” Xi said. “No matter what fluctuations there are in the international situation, China and Russia have always firmly taken the development of relations as a priority.”
Xi has stuck to those words, even after Putin launched his invasion of Ukraine just over a year ago. Less than three weeks beforehand, Putin visited Beijing and signed what China once referred to as a “no limits” partnership. Chinese officials have steered clear of criticizing Russia — and they wouldn’t even call it a war — while echoing Putin’s narrative that NATO expansion was to blame.
Close but not equal
Concerns are mounting over Beijing’s potential to provide Russia with weapons. Last week, POLITICO reported that Chinese companies, including one connected to the government in Beijing, have sent Russian entities 1,000 assault rifles and other equipment that could be used for military purposes, including drone parts and body armor, according to customs data.
Chinese and Russian armed forces have also teamed up for joint exercises outside Europe. Most recently, they held naval drills together with Iran in the Gulf of Oman.
During Xi’s visit this week, the two leaders are expected to conclude up to a dozen agreements, according to Russian media TASS. Experts say Xi and Putin are likely to sign further agreements to boost trade — especially in energy — as well as make more efforts to trade in their own currencies.
Xi is also expected to reiterate China’s “position paper” with a view to settling what it calls the “Ukraine crisis.” The paper, released last month, mentions the need to respect sovereignty and resume peace talks, but also includes Russian talking points such as dissuading “expanding military blocs” — a veiled criticism of U.S. support for Ukraine to potentially join NATO. There are also reports that Xi could be talking by phone with Ukraine’s President Volodymyr Zelenskyy after the Moscow visit.
But Beijing’s overall top priority is to “lock Russia in for the long term as China’s junior partner,” wrote Ryan Hass, a senior fellow at the Brookings Institution, a think tank. “For Xi, cementing Russia as China’s junior partner is fundamental to his vision of national rejuvenation.”
To achieve this, Putin’s stay in power is non-negotiable for Beijing, he wrote: “China’s … objective is to guard against Russia failing and Putin falling.”
What better way, then, to show support than attending a state banquet when your notorious friend needs you most?
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( With inputs from : www.politico.eu )
The United Kingdom, the United States and Australia have “gone further down a wrong and dangerous road” with their nuclear submarines agreement, a spokesperson for the Chinese foreign ministry said Tuesday.
The agreement “completely ignored the concerns of the international community,” Wang Wenbin said at a press briefing, according to CNN.
The deal will “stimulate an arms race, undermine the international nuclear non-proliferation system and damage regional peace and stability,” he added.
On Monday, U.S. President Joe Biden announced his intention to sell five nuclear-powered submarines to Australia, after meeting with the British and Australian prime ministers at a naval base in San Diego, California.
The move is part of the broader “AUKUS” alliance, which aims at strengthening the U.S., British and Australian presence in the Indo-Pacific — mostly to counter the rise of China in the region.
Asked Monday if China would consider the submarines deal as an act of aggression, Biden said “no,” according to Reuters.
Responding to the remarks for the Chinese foreign ministry, a spokesperson for U.K. Prime Minister Rishi Sunak said Tuesday: “The AUKUS program is not about any one country.”
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( With inputs from : www.politico.eu )
If that’s true, Ukrainian President Volodymyr Zelenskyy certainly didn’t get the memo. He reportedly sees merit in parts of China’s plan, and looks forward to discussing it with China’s leaders. In fact, it was just reported that Chinese President Xi Jinping plans to meet virtually with Zelenskyy when he’s in Moscow next week to meet with Russian President Vladimir Putin. According to Zelenskyy, “The more countries, especially… large ones, influential ones, think about how to end the war in Ukraine while respecting our sovereignty, with a just peace, the sooner it will happen.”
Ukraine’s openness to China’s involvement makes sense. The plan isn’t stacked in Russia’s favor, despite the two nations’ supposed “friendship without limits” (a characterization that has proven overblown). Besides urging respect for Ukraine’s sovereignty, it contains quite a few elements which also should make Russia bristle: protecting civilians, condemning threats to use nuclear weapons and ending interference with humanitarian aid.
Importantly, Ukraine will also want to maintain good relations with China when the war is over. The cost to rebuild its infrastructure will likely exceed what the West is willing or able to provide, and the plan concludes by stating China’s desire to join the international community in supporting post-conflict reconstruction.
To be clear, this isn’t an argument for the Chinese plan itself. The plan is thin on details, and an immediate ceasefire could freeze Russia’s territorial gains in place and sap Ukrainian battlefield momentum. When China didn’t vote with the majority of countries at the United Nations to condemn Russia’s invasion as illegal, China’s judgment and impartiality were rightly questioned. Beijing also might be motivated as much by a desire to boost its international reputation as a desire to effect peace.
But when creative diplomacy is the only alternative to a costly and expensive forever war, no diplomatic effort should be summarily brushed aside. The Biden administration should see this as an opportunity to work collaboratively with China, to combine the clout each has with one of the combatants to, say, co-host negotiations which ultimately reaffirm Ukraine’s sovereignty and assure its future security. Unfortunately, Washington seems so allergic to the prospect of China playing a major diplomatic role that it is blind to the reality that U.S. interests might be well served by a Chinese diplomatic success.
Many analysts and U.S. officials have long believed that Ukraine will be unable to retake all of its territory by force, and that ending the war will require a diplomatic settlement. Well-entrenched Russian forces cannot be expelled from Crimea without the sort of Western-backed Ukrainian offensive which would risk triggering Russia’s use of nuclear weapons. Though it publicly supports Ukraine’s right to recapture Crimea, the Biden administration shrewdly refuses to supply Ukraine’s military with the long-range missiles such an effort would require, and privately asked Zelenskyy to remain open to negotiations.
Within the administration, the military leadership has shown the most prudence. I recently sat down with Gen. Mark Milley, chairman of the Joint Chiefs of Staff, for an upcoming episode of Eurasia Group Foundation’s None Of The Above podcast, and he said neither Russia nor Ukraine is likely to achieve their “complete political objectives through military means.” Instead, he insists the war will probably end when “somewhere, somehow, someone’s going to figure out how to get to a negotiating table.” When asked if the U.S. should take any peace plan seriously, regardless of whether it came from Italy, Turkey or even China, Milley didn’t disagree.
A negotiated outcome would be morally unsatisfying compared to a decisive defeat and Russia’s full withdrawal from occupied Ukrainian territory. But such a withdrawal remains improbable given the harsh realities of Russia’s degraded but still-considerable military capacity, continued resolve to fight and nuclear posture. The decision about whether and how to negotiate ultimately belongs to the leaders of Ukraine and Russia alone, not the U.S. (or China). But we should not automatically dismiss peace overtures from perhaps the only country which possesses both close diplomatic ties with and considerable economic leverage over Russia.
If Putin’s battlefield failures continue to mount, pressure from China could help bring him to the negotiating table. America’s approach to ending the war in Ukraine should recognize these realities. It should also recognize the hypocrisy inherent in touting Ukraine’s agency when it prosecutes war, but not when it pursues peace.
The Biden administration’s tendency to cast international politics as a grand struggle between democracy and autocracy could muddy its strategic calculations. The president stated it would not be “rational” for China to assist with peace negotiations, reinforcing a notion that autocratic countries simply can’t play a constructive role in resolving the war which happens to pit an autocracy against a democracy.
Such an ideologically inflected approach ignores the possibility that successful diplomacy is often based on shared interests, not just shared values. China might not share America’s frustration with Russia’s challenge to the Western-led geopolitical order, but Chinese leaders want to limit economic disruptions and nuclear escalation risk. We can criticize China’s form of government and human rights violations while appreciating their rational interests in ending the war.
Ukraine is fighting a just and courageous battle, and the Biden administration’s support for Kyiv has been at turns generous and judicious. But as the stakes, costs and risks increase, the U.S. will want to accelerate the end of hostilities.
If China can actually help Ukraine reach mutually acceptable terms with the country that invaded it, killed scores of its people and occupied its territory, surely the U.S. can muster the humility to permit its main geopolitical rival a diplomatic victory. After all, true diplomacy requires working with competitors, not just friends. In his State of the Union address, Biden said he is “committed to work with China where it can advance American interests and benefit the world.” This could be the first real test of that commitment. In Ukraine, China’s win need not be America’s loss.
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( With inputs from : www.politico.com )
India’s External Affairs Minister S Jaishankar said in an interview a few days ago: “Look they (China) are a bigger economy. What am I going to do? As a smaller economy, I am going to pick up a fight with bigger economy? It is not a question of being a reactionary; it is a question of common sense.”
Obviously, Jaishankar is advising caution in dealing with China because its bigger economy translates into greater military strength and stronger diplomatic clout. Most political and diplomatic commentators have kept quiet about the far-reaching implications of this statement and those who have spoken, have reacted adversely generally characterizing it as ‘capitulatory mentality’.
Leaving aside the question whether External Affairs Minister should have publicly broached the subject or left it to closed-door conclaves of policymakers, one must frankly accept that the whole issue of Economy and Diplomacy is extremely important and needs to be openly discussed. Informed public opinion is essential for the success of Government policies in a democracy. One hopes that Jaishankar’s frank articulation of the problems of pursuing a viable security policy vis a vis China because of economic asymmetry will start a much-needed debate on the importance of economy for defense and diplomacy.
Public should be made aware of facts
China’s GDP is $18 trillion while that of India is $3.47 trillion or 1/5 that of China. In 1950 the GDP of both countries was about the same.
For perspective it may be noted that US GDP is 25 trillion, that of Japan 4.94 trillion and Germany 4.25 trillion. When US power was at its peak in the 1950s after the Second World War, its GDP was 40% of the world’s total. Today its economic and military preeminence is not the same, because other economies have risen and its share of world GDP has shrunk to about 23%.
China’s diplomatic clout has been increasing in the step with its economic power. Mao had famously said that “power flows from the barrel of a gun,” but it is Deng’s pragmatic economic policies exemplified by his famous declaration “no matter it is white cator black as long as it can catch mice” that has transformed China into a global power. With this one sentence he jettisoned three decades of ideological dogmatism in economy and substituted it with result-oriented pragmatism. Within 40 years China became an economic giant and manufacturing hub of the world.
Diplomatic muscle of Japan and Germany
Other examples of diplomatic muscle because of their economic strength are Japan and Germany the third and the fourth largest economies in the world. With large foreign exchange reserves these countries can pursue economic diplomacy to promote their national interest very effectively. The relationship between economy and diplomacy is the same as between body and fist, the power of the latter depends on the strength of the former.
India’s own international footprint has increased since 1991 when under Prime Minister Narasimha Rao and Finance Minister Dr. Manmohan Singh, the economy was unshackled and the suffocating “license Raj” relaxed. In 1991 India was about to default on its foreign payment obligations. With foreign exchange reserves adequate only for about three weeks of imports it had to pledge gold in international market to borrow hard currency for its foreign exchange requirements. Today, with its foreign exchange reserves position comfortable, India is in a position to stand up to international pressures much better and pursue foreign policy dictated by its national interest. The frequent difficulties faced by the Latin American countries to effectively pursue independent foreign policy due to external debt and inadequate foreign exchange reserves, clearly establishes the relationship between economy and diplomacy.
It is easy to establish the correlation between economic strength and diplomatic clout but impossibly difficult to attain it. Often there is a tendency to attribute China’s economic progress to its authoritarian system. It is a mistake. Soviet Union despite its authoritarian decision-making failed to achieve economic progress and collapsed. China’s economic progress took off when it allowed free enterprise in economy while retaining one-party rule politically. Many in India attribute its slow economic growth to the elaborate consultative decision-making progress inherent in a democracy. This is a mistaken notion.
Democracy can outperform authoritarianism
Democracy can outperform authoritarian system in all respects–economic, political, technological–if it has the honest commitment of the people and the leaders for its success. Democracy and economic success need political leadership which truly adheres to the rule of law, justice, equality, individual freedom, human rights, transparency and accountability. Democracy has a self-correcting mechanism which prevents things from going over the cliff as has happened to so many authoritarian regimes in the 20th and 21st centuries e.g., Nazi Germany, Fascist Italy, Soviet communism, dictatorships in Middle East.
On the part of captains of business and industry it requires honest commitment to rule of open and free competition, not pursuit of cronyism for quick wealth. Cronyism is feudalism in economics. It prevents inclusive and sustained growth which alone can make a society stable and strong.
Comparative studies of democracies and authoritarian regimes in 20th century clearly show that democracies have achieved much more economically and have shown more sustaining power politically than authoritarian systems.
But democracy requires patience and honesty on the part of the people for its success. Impatience leads to shortcuts to attain political power and cronyism in business and industry.
Democracy is a government of the patient, for the patient and by the patient just as authoritarianism is a government of the impatient, by the impatient and for the impatient.
All authoritarian leaders display impatience while good democratic leaders act with patience and stamina. Impatience is inherently unsustainable and quickly self-destructs. A study of the 20th century dictatorships and democratic regimes establishes the validity of this proposition. Dictators are gone while democracies plod on.
China will have to one day reconcile its one-party political system with the free enterprise economy. It cannot go on with this dichotomy between its political and economic systems without tensions and conflicts. India for its part will have to protect, preserve, and strengthen its democracy.
Ishrat Aziz is an expert on a variety of subjects including democracy and its connectivity with Islam. A former ambassador of India to several Middle Eastern countries, including the Kingdom of Saudi Arabia, he now resides in the US.
Canberra: ‘Red Alert’ – a joint report of Australian newspapers – The Sydney Morning Herald and The Age, warned the country to prepare for war with China in the next three years, reported Taiwan News.
The independent report, entitled “Red Alert,” was authored by five security analysts, namely – Alan Finkel, Peter Jennings, Lavina Lee, Mick Ryan and Lesley Seebeck and published by the Nine Entertainment media group.
The report indicates that a conflict involving Taiwan and China is much more likely than most Australian citizens realize, reported Taiwan News.
The general view of the analysts is that Australia is not ready to be drawn into a war involving China and Taiwan, but that the country should begin preparing with a sense of urgency.
Further, given the country’s alliance with the US, it would be very difficult for Australia to avoid involvement in a war, the report said.
“An attack on Taiwan is the subject of most speculation but not the only scenario which would threaten Australia’s security and prosperity. Australia must not prepare itself for a single scenario. Instead, it must put a priority on flexibility to deal with many contingencies. Democracies rarely predict their next war, and the next war is guaranteed not to be like the last,” the report added.
“Our assessment of the risk of war is based on President Xi Jinping’s aggressive stance and rapid military build-up,” the Red Alert report read. It suggests a three-year time frame because, according to the analysis, “a tipping point” will be reached around 2027, after which “Beijing will have military superiority over the US in the Taiwan Strait.”
The analysts also factor in China’s demographic crisis. They suggest that from Xi’s perspective, there is only a limited window in which China will be capable of pursuing such a large scale military operation, reported Taiwan News.
“Xi judges China to have greater political will than the US and its allies. Yet Xi must fear that this advantage could be temporary as China’s population shrinks and its economy slows. This window of opportunity will not be open for long. Xi may be tempted to strike at the moment of greatest opportunity. A weakening China is no less dangerous,” added the report.
On the issue of whether the Australian government would support the US and Taiwan in a conflict, one analyst, Mick Ryan said the decision has already been made. “We have made our choice. If the United States goes to war with Taiwan, we are going to support them one way or the other,” he said.
Australia finds itself in a precarious position, because its greatest trading partner is also the greatest potential threat to its sovereignty. The analysts believe that Canberra would not be able to resist involvement because the consequences of allowing China to conquer Taiwan would imperil the regional and global order, and thereby, Australia’s own livelihood, reported Taiwan News.
“Any attack on Taiwan is neither a marginal matter nor a local one. If successful, it would strike at the heart of global norms that have underpinned international security and prosperity . . . South-East Asia and the Pacific island states could then be dominated by Beijing. Australia’s commercial and security lifelines to the world would operate only at Beijing’s pleasure. Australia would be highly vulnerable to economic coercion, military intrusion or both,” states the report.
SRINAGAR: As expected, the Tehran-Riyadh restoration of ties with Beijing’s help has led triggered a serious debate the world over. With most of the countries supportive of the agreement, a general perception is that the USA, the world’s most powerful nation, has been side-lined by an emerging China.
US President Joe Biden with MbS of Saudi Arabia on July 15, 2022. They barely shook hands.
The most vociferous reaction has come from Israel where senior opposition leaders have termed the agreement Tel Aviv’s failure.
“The restoration of relations between the Saudis and Iran is a serious and dangerous development for Israel that represents an Iranian diplomatic victory. It represents a critical blow to efforts to build a regional coalition against Iran,” Naftali Bennett, Israel’s former Prime Minister was quoted as saying by Times of Israel. “This is a resounding failure of the Netanyahu government and is the result of a combination of diplomatic neglect, general weakness and internal conflict in the country.”
Bennett was not alone. Yair Lapid, also a former Prime Minister also termed the agreement as “a complete failure” for Israel, calling it “a collapse of our regional defensive walls that we had been building against Iran.”
Iran and Saudi Arabia, barely separated by a 150-mile distance were representing two extremes in the Middles East. They were literally rivals in most of the conflict areas in the region. Besides, they were using Shia-Sunni sectarianism as part of their foreign policy in other Muslim countries.
Iran and Saudi Arabia have agreed to resume diplomatic relations after four days of intensive previously undisclosed talks in Beijing.
Israel, it may be recalled here had normalised relations with Bahrain, Morocco and the United Arab Emirates in 2020. The agreement with Iran came as Tel Aviv was negotiating a relationship with Riyadh. While these efforts are likely to continue, the possibility of kicking Tehran out of the frame may not be possible. Israel sees Tehran as its enemy and dislikes its nuclear programme and Riyadh was almost thinking on the same terms. This had led to a sort of coalition with the Middle East excluding Iran. The agreement is expected to change that.
Israel apart, the response from almost every other power centre has been positive. Some Western countries including USA and France have responded to the development with a bit of caution.
“United Nations spokesperson Stéphane Dujarric expressed the gratitude of the United Nations Secretary-General to China for hosting the recent talks, and the United Nations Secretary-General welcomed the efforts of other countries in this regard, especially the Sultanate of Oman and Iraq,” Saudi Press Agency reported. “The UN spokesperson also stated that good neighbourly relations between Saudi Arabia and Iran are necessary for the stability of the Gulf region.”
In Brussels, the European Union (EU) has also welcomed the agreement.
“Generally speaking, we welcome any efforts to help end the war in Yemen and de-escalate tensions in the Middle East region. De-escalation and diplomacy together with deterrence are key pillars of the policy President Biden outlined during his visit to the region last year,” US NSA spokesperson John Kirby was quoted as saying. “The Saudis did keep us informed about these talks that they were having, just as we keep them informed on our engagements, but we weren’t directly involved.”
President Xi Jinping with Saudi Crown Prince and Prime Minister Mohammed bin Salman (Mbs) in Riyadh on December 9, 2022
When asked by reporters, Biden said: “Better relations between Israel and their Arab neighbours are better for everybody.”
What is interesting, however, is that the agreement is being seen as a side-lining of the US in the region. A general impression is that the US was selling arms to fuel the conflicts in the region and, instead, China used trade to get the rivals closer.
Major Development: China Brokers Peace Between Iran and Saudi Arabia
The agreement is expected to have a cooling effect on at least three ragging conflicts in the region. In Yemen, Iran was supporting Houthi rebels and Saudi Arabi was funding the exiled government. In Lebanon, Iran was backing Hezbollah and Riyadh money was surviving the Sunni political class. The two countries were the proxy players in Suria where Iran supported President Bashar Assad and Riyadh was closer to the rebels.
Analysts believe t is too early to predict a major shift as the parties will have to work on the agreement. The divisive politics in the region has been played for such a long time that converting it into peace will take a long time. Those unhappy can contribute to making the agreement evaporate.
