Unryu Suganuma

G7 →G20→G1?

Unryu Suganuma — Mon, 05 Jan 2009 15:56:18 +0000

On October 10, 2008, G7 (the world’s leading powers) including Japan met in Washington addressing five points to stabilize the financial chaos. George W. Bush tried to convince members of the G-20 countries including China, which collectively account for 85 percent of the global economy, to help the US. Without significant achievements from these meetings, it seems to everyone that “going it alone” is only the solution. The Japanese prime minister Aso Taro publicly made a proposal to host “G7 summit” in Tokyo on October 11, 2008, but no leaders expressed interests in Aso’s idea. By now, it is clear that the G7 is not able to stabilize this financial chaos. Unfortunately, the meltdown of the global financial system, will not stop until the end of the American presidential elections on November 4th and beyond. Probably the chaotic period will continue after January 20 when Obama takes office. By then, every country goes its own way to deal with the financial crisis (G1).

ASEM vs. Uncle Sam

Unryu Suganuma — Tue, 30 Dec 2008 17:57:10 +0000

The word APEC (Asia-Pacific Economic Cooperation) has often been heard in the mass media, but a few people have heard of ASEM (Asia Europe Meeting). The difference between ASEM and APEC is “without Uncle Sam” or “with Uncle Sam.” ASEM, which was established in 1996 will have its seventh meeting this year. However, this year is different is much different from the past. Today, the whole world was paying attention to ASEM, with its 27 member nations in the European Union as well as 16 Asian countries. With the financial crisis starting to look like the beginning of a global recession; everyone is looking for China to play a leadership role with its nearly $2 trillion in foreign reserves. This year’s meeting was held in Beijing where the world expects Chinese economic growth to strengthen the global finances and to prevent a recession. The ASEM meeting appears to be a victory for Nicolas Sarkozy, who has emphasized “the need to improve the supervision and regulation of all financial actors, especially their accountability (Japanese media).” While Sarkozy has studied Karl Marx’s Capital extremely hard after the recent chaos Wall Street (according to the Phenix News), he is willing to confront Washington pushing them to take responsibility in fixing global financial system. As Wen Jiaboa stated, “Lessons should be learned from the financial crisis, and the responsibilities should be clarified for governments, companies, and supervision respectively (Xinhua News).” Fundamentally, ASEM in Beijing supports Sarkozy’s idea to undertake effective and comprehensive reform of the international monetary and financial systems. The Beijing statement by ASEM has laid down the groundwork for a “Global Financial Summit” on November 15th in Washington. The growing role of ASEM demonstrates that the international community no longer trusts America to address the growing financial crisis. Without Uncle Sam, ASEM in launched a framework to address financial issues. Interestingly, an APEC meeting was scheduling to be held in Peru at the end of November, after the ASEM in Bijing.

50% of Toy Exporters Out of Business

Unryu Suganuma — Sun, 28 Dec 2008 18:56:42 +0000

Since January 2008, a total of 3,631 small-sized toy producers, 52.7 percent of the industry’s businesses, shut down, according to the Chinese and Japanese media. The rising Chinese currency, along with escalating production costs, drove these exporters out the business. In addition, the financial meltdown in the US provided another tsunami wave to the Chinese toy business. On October 15, factories owned by Smart Union Group Ltd., in Dongguan in Guangdong province, became the latest victim. More than a thousand laborers protested outside the factory’s main gate demanding wage payments and others. Eventually, after the city government provided their wage payments; the laborer protests ended.

Russian Oil Pipeline Went To China, but not Japan

Unryu Suganuma — Fri, 26 Dec 2008 11:16:29 +0000

For years, both Japan and Chinahave negotiated with the Russians to construct an oil pipeline in the Asian region. As Wen Jiabao made his trip to Russia in the end of October, the Russians agree to extent the oil pipeline to the Chinese border. Once again, Japan fell behind the Chinese. Japan wished to build an oil pipeline from Siberia to Japan before China, going as far as providing both capital and technological support. Yet, China won. On October 28, Russia and China came to an agreement to import Russian oil via an offshoot of the Eastern Siberia-Pacific Ocean (ESPO) pipeline to China in return for Beijingproviding about $20-$25 billion in loans to Russian state companies Rosneft and Transneft. According to the agreement based on the Chinese media, Transneft and China National Petroleum Corporation (CNPC) agreed to build an offshoot to the ESPO pipeline to China. The 4,700km ESPO pipeline is currently under construction and is being built in two stages. The first 2,757km stage will link Taishet in the Irkusk region to Skovorodino. The offshoot to Chinawould connect Skovorodino, which is situated about 70km from the Chinese border, to northern China. According to some sources, Rosneft would commit to transporting around 15mn tones per annum, or about 300,000b/d (accounting for almost 4% of China’s total oil consumption in 2007), to China over a 20 year period. During the chaotic financial crisis, China’s loan offer is a smart geo-strategic and tactical move, which may provide it with a stronger bargaining position in the ongoing negotiations concerning long-term oil export prices and volumes.

The 30th Anniversary of Sino-Japanese Peace Treaty

Unryu Suganuma — Sun, 21 Dec 2008 09:50:59 +0000

The paramount Chinese leader Deng Xiaoping went Tokyo and signed the China-Japan Peace and Friendship Treaty with the Japanese Prime Minister Fukuda Takeo in October 23, 1978. The year 2008 is the 30th anniversary of the peace treaty. Unfortunately, there is no cause for celebration regarding Sino-Japanese relations. A few reasons can be summarized. There are a few reasons for this. First, the meltdown of Wall Street has become a daily headline. Addressing the financial crisis is a bigger priority for both Japan and China. Second, the stability of Japanese politics is an issue. No one knows how long Aso Taro can stay in power. Within two years, three prime ministers have been changed: Abe Shinzo (9 months), Fukuda Yasuo (about 11 months), and Aso Taro (unknown). Third, Japan lacks a charismatic politician who can show leadership in both domestic and international arenas. Therefore, the Japanese side cannot promise anything to China as it will lead to rebellion inside Japanese politics. Basically, political power in Japanese politics has been inherited through family dynasties, preventing talent people from getting into politics.

Territory Between China and Russia

Unryu Suganuma — Fri, 19 Dec 2008 14:26:40 +0000

In 1929, the former Soviet Union invaded Heixiazi (R: Bolshoi Ussuriysky) Island while the Chinese empire was in chaos. In addition, the Russians occupied Yinlong (R: Tarabarov) Island. Heixiazi and Yinlong islands are located at the confluence of the Amur and Ussuri rivers in Manchuria, about 1,000 miles northeast of Beijing. During the cold war, the two rivals fought over the frontier of these islands in the 1960s. However, on October 14, 2008, the Russians and the Chinese finally ended the territory disputes following decades of negotiations. Under this agreement, Russia and China divided the disputed territories along the Amur River and the upper Argun River, along with the Tarabarov and Great Ussuriisky Islands. Russia agreed to give up Yinlong Island and half Heixiazi islet, about 174,000 square kilometers of the disputed 375,000 square kilometers. But, this agreement has angered both the Russian and Chinese citizens. The Chinese want everything returned to China, not the half of Heixiazi Islands, while the Russians want to have the whole Heixiazi Island since they possessed it for years. Despite the objections, however, both governments want to develop the disputed area into a peace zone. In fact, for years, the Khabarovsk territory government developed a plan to establish a Sino-Russian trade zone on Great Ussuriisky Island. On the Chinese side, Heilongjiang province expects that the railroad in Harbin will connect with Siberian Railroad, leading to trade to with Europe, as far as Rotterdam, Netherlands.

A Historical Day For the Chinese People

Unryu Suganuma — Mon, 15 Dec 2008 13:08:18 +0000

On November 3^rd, Chen Yunlin, Head of Mainland Affair Council, arrived in Taiwan, becoming the first Chinese high official to visit the island. Chen and Chiang Pin-kun, Head of the Straits Exchange Foundation, signed an agreement by stopping “3 NOs” from Taiwan. The major items in the agreement are:

a. A daily direct flight will expand from current 36 flights to 108 flights (the flight time will be reduced from 3.5 hours to 1.5 hours).

b. The direct cargo flights will be expanded to 60 cargo flights a month.

c. The mainland China airports with access to Taiwan will increase from the current 5 airports to 21 airports.

d. And the direct shipping fleet between both sides will be opened to 11 ports in Taiwan and 63 ports in mainland China.

Even though a huge demonstration organized by the opposition party on November 6th, Ma Ying-jeou made history when he became the island’s first leader to hold talks with a senior Chinese official Chen Yunlin at a government guesthouse in Taipei since the end of the civil war in 1949. Lien Chan, Chairman Emeritus of KMT (Kuomintang), attended the 2008 Peru APEC Summit, making the compromise from the mainland China to allow Taiwan’s international participation. As a result of this move Chan will be the highest official from Taiwan to join any international organization including APEC meetings since 1970s when Taiwan was ousted out from the UN.

On December 15th, both Taiwan and mainland China finally opened the direct daily flights, postal, and shipping services, the historical day for the Chinese people. In total, 12 airlines from both the mainland China and Taiwan will fly more than 100 flights a week, providing links between 4 cities in Taiwan and 12 cities in the mainland China.

Political Family Dynasties

Unryu Suganuma — Wed, 10 Dec 2008 04:10:48 +0000

In September, the former Prime Minister, Koizumi Junichiro, announced that he would not run in the next lower house election. But, Koizumi recommended his 27-year-old son to take his seat to run the next election simply because Koizumi inherited this political seat from his family at age 27. Nearly, one-third of the members of the lower house (total 480 members) are descended from political families. Recent prime ministers, Obuchi Keizo, Koizumi Junichiro, Abe Shinzo, Fukuda Yasuo, and Aso Taro, all came from political family dynasties. This created one major problem for Japanese politics; that is, no talented people can get into politics. As a result, these third class politicians only make third class political decisions. No wonder no Japanese politicians have never played a significant role in global politics. Sadly, the political dynasties are also beginning to show in Chinese politics too. The former and current vice president of China, Zeng Qinghong and Xi Jinping, are all from revolutionary family dynasties. Will China follow Japan’s step? The answer probably will be “yes.”

Save AIG, not Lehman Brothers

Unryu Suganuma — Fri, 05 Dec 2008 06:27:54 +0000

By now, many people are wondering why did the American government save AIG, but abandon Lehman Brothers. There is one factor that many don’t know- the “China Factor.” According to some Chinese sources, Beijing pressured to Washington to save AIG because a majority of Chinese companies and institutions including insurances, banks, and government, were heavily invested in AIG. If AIG were to enter bankruptcy, China would have to sell its US bonds to make up their losses. That was one crucial factor in Washington saving AIG, but not Lehman Brothers.

Asia Bond

Unryu Suganuma — Mon, 01 Dec 2008 10:54:05 +0000

Thaksin Shinawatra, the former prime minister of Thailand, made an interesting proposal to create an Asia Bond to save Asian countries (Financial Times October 6, 2008). According to his plan, Asian countries including China, Japan, Korea, Singapore, and Thailand, could agree to pool some of their reserves in a certain ratio into a basket of currencies to issue a bond. Thaksin Shinawatra mirrored bonds used in the EU adapted to the Asian region. The idea is interesting, but it is not realistic. A reason is very simple!! There is no trust among Asian countries, especially between China and Japan or/and Korea and Japan(please see recent Tamogami Toshio’s article regarding WWII history). The WWII history is still not behind the Chinese and Japanese. A number of issues, such as recognition of WWII history, comfort women, visiting Yasukuni, and territorial problems, are major obstacles for other counties to create an Asia Bond with Japan. If China took the leadership, Japan will be jealous and reluctant to join. If Japan took the initiative, China may be skeptical about Japan’s motives. Japan in the Asian region is comparable to Germany in the EU. The majority people in Germany have appropriately addressed their past history sincerely including an apology by West Germany Chancellor Willy Brandt in the 1980s; however, a majority Japanese politicians do not believe that Japan did anything wrong during the Second World War. The right-wing groups in Japan have constantly looked for any opportunity to justify, revise, and rewrite the WWII history. Unless the Japanese right-wings clean up their own dirty laundry first, it is difficult to convince anyone in the Asian region to trust the Japanese politicians. If one cannot take any responsibility for its past, how can expect one to take any responsibility in the future?