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China Pledges Yuan Flexibility

Nikki Soo — Mon, 21 Jun 2010 02:31:12 +0000

On Sunday, China stated that any appreciation in its currency value would be gradual, a day after announcing that it would allow a more flexible currency. This move is a clear attempt to reassure the Chinese people that there would not be a disruptive change, many of whom view the appreciation as a sign of submission to the United States.

China has come under increasing international pressure to change its currency policy, especially from the US, insisting that China is artificially keeping the value of the yuan low to help its exporters at the expense of foreign competitors.

China has effectively pegged the yuan to the US dollar for the last two years. In 2005, it briefly allowed a controlled appreciation of the currency, but ended that policy when the global economic crisis threatened demand for its goods abroad.

Sources:
China Yuan Stability Pledged [BBC News, 20 June 2010]
Rise in Currency to be Slow, China Insists [The New York Times, 21 June 2010]

Japan’s Hatoyama Steps Down over Base Row

Nikki Soo — Wed, 02 Jun 2010 01:43:17 +0000

According to national broadcaster NHK, Japanese Prime Minister Yukio Hatoyama will announce his resignation at an emergency plenary meeting of ruling party lawmakers later today. Hatoyama’s broken campaign promise to move a US Marine base off Okinawa caused protests to erupt and approval ratings for the Democratic Party of Japan to drop severely.

This announcement comes after Hatoyama held a meeting with DPJ party members where despite calls by his members to resign, he vowed to continue in his post.

Sources:
Japan PM Hatoyama Pledges to Stay On, but Future Uncertain [The Wall Street Journal, 31 May 2010]
Hatoyama Resigns over Base Row [The Wall Street Journal, 2 June 2010]

Timeline: straining of US-China relations in 2010

Jadey Huray — Thu, 11 Feb 2010 08:22:28 +0000

In the initial months of 2010, there was a shift in U.S. strategy, with the U.S. seeming reluctant to cede to China any diplomatic ground at all. Secretary of State Hillary Clinton criticized China for censoring the Internet, in the wake of Google’s allegations about Chinese hackers. The Obama administration went ahead with weapons sales to Taiwan and a meeting with the Dalai Lama, despite threats of sanctions. In February, the Obama administration revived pressure on China to stop artificially depressing its currency. So far, the rows have not gone beyond rhetoric, but they signal that ties are fraying between the two giants.

Date:	Summary:
Jan-06-2010	US President Barack Obama who was bound by the 1979 Taiwan Relations Act (an act binding the US to ensure Taiwan can respond to Chinese threats) approved the sale of weapons including missiles, ships, helicopters, of worth US$6.4 billion to Taiwan.
Jan-11-2010	China deliberately releases details of a ballistic missile defense capabilities test, in a move, some experts say is supposed to be a reaction to the weapons sale.
Jan-15-2010	Google threatens to withdraw from China over email hacking and censorship. The US government reacts by criticizing China and expressing its intention to lodge a formal complaint to Beijing. The event reignites debate regarding human rights issues in China.
Jan-29-2010	The US warns China with threats of diplomatic and economic isolation if it did not agree to tougher new sanctions against Iran (China’s third largest source of crude oil) to halt its nuclear program.
Jan-30-2010	In retaliation to the US arms package for Taiwan, China suspends military contact with the US and imposes sanctions on companies selling weapons to Taiwan. Chinese officials maintain that Taiwan is a part of its territory and thus must be reunited with the mainland.
Feb-03-2010	Obama stated last week that countries that undervalue their currency, in an indirect jab at China, put the US at a “huge competitive disadvantage”. He also hinted at tougher action against such countries.
Feb-06-2010	The White House confirms that US President Barack Obama will meet with the Dalai Lama (the exiled Tibetan spiritual leader), when he arrives in Washington on February 17, for a 10-day US visit. The move sparks China to reaffirm that it “resolutely opposes” such meetings with the alleged separationist.
Feb-10-2010	Continued US surveillance in the South China Sea has also raised tensions. The surveillance ships operate within China’s disputed economic zone (off-limits to foreign patrols), approximately 370 km off the Chinese coast. In March 2009, Chinese ships challenged a US spy ship.

Iranian nuclear program received with mixed reactions

Jadey Huray — Fri, 05 Feb 2010 02:28:17 +0000

On Wednesday, 3rd of February, Iran launched a rocket into space, violating international law. Iran now faces the threat of new sanctions from the US and others. The incident has also increased diplomatic tensions between countries that disagree how to engage Iran, especially the US and China.

The domestically-produced Kavoshgar-3 rocket was equipped with a satellite carrying a mouse, worms and two turtles. Broadcasted live yesterday by state-run television programs, the event culminated with the unveiling of three Iranian satellites during a ceremony attended by Iranian President, Mahmoud Ahmadinejad. The act was described as “provocative” by White House spokesman Bill Burton, amidst rising concerns among Western powers that the same technology used in the launch could be harnessed to build long-range nuclear weapons. Iranian Foreign Minister Manouchehr Mottaki however, claims that “Iran does not seek to produce nuclear weapons” and instead is pursuing the nuclear technology for energy purposes.

Iran is now faced with threats of “severe sanctions” by the UN Security Council, the United States and other countries due to its suspected nuclear weapons programs. In a bid to target Iran’s petrol supply, the sanctions would be aimed towards non-Iranian firms that operate in the energy sector or aid Iran in any way with the production or import of refined oil products. Another Western power, Australia, has also followed suit by blocking several export shipments to Iran under suspicion of being used for its nuclear weapons program. In conjunction with UN efforts to halt Iran’s nuclear weapon program, Australia has also imposed trade sanctions on Iran. Furthermore, the US has rallied other Western powers such as Britain, France and Germany to compel the UN Security Council to pressurize Iran to abandon their nuclear program.

In contrast China, which relies on Iran as its third largest source of crude oil, is unwilling to sign on to harsher penalties against Iran and has utilized its position on the UN Security Council to veto such resolutions. China’s actions come despite warnings from US Secretary of State, Hillary Clinton that China would be faced with diplomatic isolation and economic insecurity if it did not support the new sanctions against Iran. Russia another permanent member of the UN Security Council has supported China in calling for patience in their dealings with Iran and preventing harsher regulations against Iran. Malaysia has also expressed support for Iran’s right to utilize nuclear energy for civilian purposes and has refused to vote for an agreement seeking Iran to discontinue its nuclear power program. In the past both Malaysia and Hong Kong have served as hubs for “middlemen and re-export” when the United Arab Emirates increased export controls in 2007 on Iranian companies that tried to procure nuclear and weapons technology.

The inconsistency in the opinions of nations demonstrates the lack of unity on the new penalties, which some analysts say may render them as ineffective. The near-universal compliance of the sanctions is necessary for them to be successful, so that if “some countries and companies step out of doing business with Iran, others don’t fill the gap”, states Michael Jacobson, former Treasury Department terrorism-finance advisor.

Sources:

Bloomberg, “Tough Sanctions May Not Persuade Iran to Quit Nuclear Program”, January 12, 2010, http://www.businessweek.com/news/2010-01-12/tough-sanctions-may-not-persuade-iran-to-quit-nuclear-program.html

Guardian, “Iran rocket launch opens can of worms in space race with west”, February 3, 2010, http://www.guardian.co.uk/world/2010/feb/03/iran-launches-rocket-carrying-animals

Reuters, “Government calls Iran rocket launch “provocative act””, February 3, 2010, http://www.reuters.com/article/idUSTRE6124QW20100203?type=politicsNews

The New York Times, “Clinton Warns China on Iran Sanctions”, January 29, 2010, http://www.nytimes.com/2010/01/30/world/asia/30diplo.html

The Straits Times, “Aussie blocks shipments to Iran”, February 4, 2010, http://www.straitstimes.com/BreakingNews/World/Story/STIStory_486234.html

TODAY, “Iran test-fires new rocket”, February 4, 2010, http://www.todayonline.com/World/EDC100204-0000124/Iran-test-fires-new-rocket

Press TV, “West slammed for misuse of Iran nuclear drive”, January 9, 2010 http://www.presstv.ir/detail.aspx?id=115735§ionid=351020104

Press TV, “Despite US Pressure, China favors talks on Iran”, February 3, 2010, http://www.presstv.ir/detail.aspx?id=117784§ionid=351020104

India: India, US sign clean tech deal

SIIA — Thu, 26 Nov 2009 02:11:06 +0000

The US and India have signed a deal in Washington, DC aimed at promoting the development of green technology. The deal comes in the runup to the UN conference on climate change scheduled for Copenhagen for December 7-18.

The details of the entire proposal have yet to be released. Clinton said only that India and the United States would establish a research and development institute for clean energy, which will have facilities in both countries.

Source: Agence France Presse, “US, India sign climate deal,” November 25, 2009, http://www.channelnewsasia.com/stories/afp_asiapacific/view/1020396/1/.html