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Hanoi's Symbolic Pushback Against Chinese Expansionism

For the first time, Hanoi has formally marked the deaths of 74 South Vietnamese sailors killed in an attempt to dislodge Chinese forces occupying several of the Paracel Islands in the South China Sea. The Vietnamese government, many believe, is trying to stay ahead of public sentiment. On Sunday, the 40th anniversary of the sea battle, activists in Vietnam’s capital shouted anti-China slogans and laid flowers at the statue of Ly Thai To, a nationalist figure. Police allowed the unauthorized event to go on for about a half hour before dispersing the crowd.

Why Is China Blaming America for Its Flawed Dam Project?

The Upstream Ayeyawady Confluence Basin Hydropower Co. (ACHC) issued its first social responsibility report in late December on the Myitsone dam, which it is building in northern Burma. Activists immediately—and accurately—called the report “propaganda.” 

In 2009, ACHC, a Sino-Burmese consortium controlled by a Chinese state-owned entity, began work on Myitsone, located at the headwaters of the Irrawaddy River. It will be the first dam on that vital waterway and a part of a seven-dam cascade, a $20 billion undertaking.

China’s Water Crisis Made Worse by Policy Failures

On Friday, the National Development and Reform Commission announced that China will, by the end of 2015, put in place a three-tier pricing structure for water. Heavy users will pay more under the new system, which will cover all cities but not all towns. The Wall Street Journal called it “the first stab at actual resource-sector reform” after November’s Third Plenum.

Technically, it’s the first announcement of a future stab because it remains to be seen whether significantly higher charges, which will surely be unpopular, will in fact be imposed. If there were political will, the NDRC would likely have put the new and urgently needed price restructuring system in place much sooner.

Bickering US Asian Allies Complicate Regional Security

On December 26th, Shinzo Abe paid his respects to Japan’s war dead at the Yasukuni shrine.

The US expressed disappointment at the visit, the first by a sitting Japanese prime minister since 2006. Others expressed disgust. No reaction was stronger than the one from Seoul. Washington’s two main allies in the region, Japan and South Korea, can’t get along, and that animosity undermines America’s ability to defend them.

Abe said his visit to the Shinto shrine was personal, and meant “to convey my resolve that people never again suffer the horrors of war,” but few in Asia accepted the explanation. Fourteen “Class A” war criminals, including wartime prime minister Hideki Tojo, are enshrined at Yasukuni, and visits there are deeply resented throughout East Asia, even in countries maintaining good relations with Tokyo.  

China’s Credit Crunch—and Prospects for a Crash

John-Paul Smith, who predicted the 1998 Russian stock market collapse, sees China’s equity markets tanking soon. “There is potential for a debt trap in industrial companies which can trigger an economy-wide financial crisis as early as next year,” said Smith, now a strategist at Deutsche Bank, in an interview this month. China today, Smith says, resembles Russia before its markets flopped 15 years ago.

China analysts, when they think about debt, focus on out-of-control municipalities and their notorious local government financing vehicles, but, as Smith reminds us, it could be Chinese corporate debt that will be responsible for the world’s next great equity crash.

North Korea and China's Resurgent Militaries

Last Thursday’s surprise execution of Jang Song Thaek in North Korea may well suggest that a fundamental shift in the balance of power is taking place in Pyongyang. If so, it seems likely that the country’s military—at least for now—is winning in the rough game of Kim-style politics. A similar shift might also be taking shape in Beijing, where Chinese generals and admirals seem to be gaining influence in Communist Party circles. The rise of the two militaries is bound to profoundly affect an already troubled region.

Is Beijing Stacking the Deck in Hong Kong?

On Wednesday, Hong Kong’s chief secretary, Carrie Lam Cheng Yuet-ngor, released the city’s first consultative paper on electoral reform (pdf). At stake is who gets to choose the next leader—the “chief executive”—of the freest place in the People’s Republic of China.

In the last “election,” which took place last year, Beijing essentially picked the chief executive by informally making its preference known to a select group in Hong Kong—1,200 notables in a city of more than 7 million—that constituted the Election Committee, which formally made the choice. The process was deeply unpopular and will surely change in time for the next election.

North Korea Detains 85-Year-Old American Veteran

On October 26th, two uniformed North Korean officers marched Merrill Newman off his plane just before it departed the regimented state for Beijing. The 85-year-old Korean War veteran has not been heard from since. Bob Hamrdla, who traveled with him on the 10-day trip, said his detention “has to be a terrible misunderstanding.” Newman’s wife, in a statement issued from her home in Palo Alto, California, used the same word.

America the Generous

After Typhoon Haiyan swept through the Philippines this month, Beijing announced a contribution to Manila of $100,000. Derided almost everywhere for its stinginess, China then reconsidered. Beijing then said it would make a subsequent gift of $1.64 million and extended the offer of rescue and medical assistance teams.

Are China's Dissidents Becoming Violent?

In the central Chinese city of Taiyuan last Wednesday, seven nearly simultaneous explosions killed one person and injured eight others, according to official reports.

“At the time of going to press, there was no indication that Wednesday’s serial blasts involved terrorism,” the Global Times, the Communist Party–run newspaper, wrote on the day after the incident. The suggestion of terrorism, however, was unmistakable, even then. Police had found fragments of circuit boards at the sites of the detonations, an indication that they were the result of homemade devices. Also, “finger-length long nails” and ball bearings littered the scenes, conclusive proof of an intention to harm passersby.

Putin the Powerful?

Last week, Forbes named Vladimir Putin the world’s most powerful person. The Russian president edged out the American and Chinese leaders. Barack Obama came in second and Xi Jinping third in the magazine’s fifth-annual list.

So congratulations to President Putin. Yet his perch at the top could be short-lived. It’s true, as Steve Forbes explained, his publication ranked people and not countries, but Putin’s fortunes and influence, no matter the strength of his personality, will diminish as his country’s accelerating economic decline and irrelevance continue, as seems inevitable today.

State Department Opposes New Iran Sanctions

“We think that this is a time for a pause, to see if these negotiations can gain traction,” said Under Secretary of State Wendy Sherman to Voice of America on Friday, explaining why she wants Congress to defer passing additional sanctions on the Islamic Republic of Iran.

Former Chinese Leader Hu Jintao Indicted

On October 10th, Spain’s top criminal court indicted former Chinese leader Hu Jintao “as part of an investigation into whether the Chinese government tortured and repressed the people of Tibet as part of an attempted genocide,” in the words of one news report. Hu presided over a bloody crackdown in 1989 while serving as Communist Party secretary of the region, and his tenure as president of the country was also marked by harsh rule there. His predecessor, Jiang Zemin, has already been charged by the same court with related crimes.

Is China Turning Up the Heat on Taiwan?

“Increasing mutual political trust across the Taiwan Straits and jointly building up political foundations are crucial for ensuring the peaceful development of relations,”said Chinese leader Xi Jinping to the Taiwanese envoy Vincent Siew on October 6th, according to remarks paraphrased by Beijing’s official Xinhua News Agency. “Looking further ahead, the issue of political disagreements that exist between the two sides must reach a final resolution, step by step, and these issues cannot be passed on from generation to generation.”

In Nuke Talks with Iran, Learn from North Korea

“We have to test diplomacy,” President Obama said in the Oval Office on Monday, with Israeli Prime Minister Benjamin Netanyahu at his side. The American leader was hopeful that the historic 17-minute phone call with Hassan Rouhani, his Iranian counterpart, on Friday signaled the Islamic Republic’s intent to come to terms with the international community over its controversial nuclear program.

Netanyahu, in his Tuesday speech to the UN General Assembly, delivered a direct attack on the Islamic Republic, which he accused of trying to build an atomic arsenal. The Israeli leader also issued a warning that diplomatic efforts might worsen the situation, and in this regard talked about the world’s less-than-impressive efforts to stop North Korea.

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