Going South

The header refers to the relationship between China and neighbours and the broader ASEAN too. Check out the news of how the China-ASEAN meeting ended without an official communique. Both sides are trying to put a lipstick on the pig. Check out the story here.

This ‘Wall Street Journal’ story is very good. Reading it brought back memories of James Kynge’ ‘China shakes the world’, published in 2006. It captures the victimhood of mentality of China rather well, as this article does:

The victimhood narrative is at the heart of a Chinese nationalism that historians trace back to the end of the 19th century when China was defeated by Japanese land and naval forces. Western nations had earlier brought China to its knees in the Opium Wars. But now it lay vanquished by a smaller Asian power. That cruel blow sparked a national awakening.

Notwithstanding China’s modern strength, the country has never fully rediscovered its self-esteem.

Very well put. Amen to that.

The implication is quite clear:

Beware a China that feels victimized; an aggrieved, resentful, backward-looking power is likely to lash out more destructively than one confident of its place in the world.

FT had a story on China backpedalling on reforms to its Public Sector Units. This paragraph is key:

All the major decisions of the company must be studied and suggested by the party committees,” according to an article by the State-owned Assets Supervision and Administration Commission in the influential party magazine Qiushi, or Seeking Truth. “Major operational management arrangements involving macro-control, national strategy and national security must be studied and discussed by the party committees before any decision by the board of directors or company management.

Charlene Chu had gotten it right in her interview with Bloomberg. She never believes in the Chinese government’s promises on reforms because precious little has been delivered. I had blogged on it here.

Amidst all the pussyfooting and handwringing with respect to China’s desires and preferences, the folks at Morgan Stanley Capital International showed real spine when they rejected, for the third time, the inclusion of China A shares in the MSCI Emerging Markets Index. By any stretch of imagination, China does not qualify to be a market economy. Certainly, not after the manner in which it intervened in the stock market last summer.

In small and big ways, there must be consequences for China’s unilateralism in South China Sea and in other matters, as Daniel Twining had noted.

On China twisting others’ arms and they, in turn, wringing their hands in despair, see this article (ht Neelkanth Mishra) in Nikkei Asian Review on how China is openly trying to influence Fed monetary policy decisions.


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