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Chiness Prime Minister visit pakistan

NOVANEWS
ISLAMABAD: China and Pakistan should make cooperation on power
generation a priority, Chinese Premier Li Keqiang said, as Islamabad seeks to end an energy crisis that triggers power cuts of up to 20 hours a day, bringing the economy to a near standstill.
Li arrived in the Pakistan capital on Wednesday on the second leg of his first official trip since taking office in March after a visit to India.
Tight security included shutting down mobile phone networks across the city.
Pakistan was one of the first countries to switch diplomatic allegiance from Taiwan to China, in 1950, and they consider each other “all-weather friends”.
In an interview with Pakistan media, Li said there was still “great potential” for the relationship. Bilateral trade last year rose above $12 billion for the first time and both sides are aiming to reach $15 billion in the next two or three years.
“Our two sides should focus on carrying out priority projects in connectivity, energy development and power generation and promoting the building of a China-Pakistan economic corridor,” Li said.
The power shortages have sparked violent protests and crippled key industries, costing hundreds of thousands of jobs in a country already beset by high unemployment, a failing economy, widespread poverty, sectarian bloodshed and a Taliban insurgency.
There are several joint energy and infrastructure projects under way in Pakistan and China has taken over operation of the strategically important Gwadar port.
When complete, the port, which is close to the Strait of Hormuz, a key oil shipping lane, is seen opening up an energy and trade corridor from the Gulf, across Pakistan to western China, and could be used by the Chinese Navy, upsetting India.
Li this week offered India a “handshake across the Himalayas” and said the world’s two most populous nations could become a new engine for the global economy — if they could avoid friction.
China and India disagree about large areas of their 4,000 kilometre border and their troops faced off for three weeks last month on a windswept Himalayan plateau where they fought a brief but bloody war in 1962.
Pakistan and India have fought three wars, two of them over disputed Kashmir.
India has responded cautiously to Li’s overtures, partly because of China’s friendship with Pakistan. For its part, Beijing is concerned about India’s growing relations with the United States.
“I wish to reiterate solemnly China’s continue firm support to Pakistan in its efforts to uphold independence, sovereignty and territorial integrity,” Li said in a possible reference to India and to the United States.

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Chinese back hacking U.S. businesses, government

NOVANEWS

Hackers working for a cyberunit of China’s People’s Liberation Army appear to have resumed their attacks using different techniques, computer-security experts and U.S. officials say.

By DAVID E. SANGERNICOLE PERLROTH

The New York Time

WASHINGTON — Three months after hackers working for a cyberunit of China’s People’s Liberation Army went silent amid evidence that they had stolen data from scores of U.S. companies and government agencies, they appear to have resumed their attacks using different techniques, according to computer-industry security experts and U.S. officials.

The Obama administration had bet that “naming and shaming” the groups, first in industry reports and then in the Pentagon’s own detailed survey of Chinese military capabilities, might prompt China’s new leadership to crack down on the military’s highly organized team of hackers — or at least urge them to become more subtle.

But Unit 61398, whose well-guarded 12-story white headquarters on the edges of Shanghai became the symbol of Chinese cyberpower, is back in business, according to U.S. officials and security companies.

It is not clear precisely who has been affected by the latest attacks. Mandiant, a private security company that helps companies and government agencies defend themselves from hackers, said the attacks had resumed but would not identify the targets, citing agreements with its clients.

It did say the victims were many of the same ones the unit had attacked before.

The hackers were behind scores of thefts of intellectual property and government documents over the past five years, according to a report by Mandiant in February that was confirmed by U.S. officials. They have stolen product blueprints, manufacturing plans, clinical-trial results, pricing documents, negotiation strategies and other proprietary information from more than 100 of Mandiant’s clients, predominantly in the United States.

In interviews, Obama administration officials said the resumption of the hacking activity did not surprise them. One senior official said Friday that “this is something we are going to have to come back at time and again with the Chinese leadership,” who, he said, “have to be convinced there is a real cost to this kind of activity.”

Mandiant said the hackers had stopped their attacks after they were exposed in February and removed their spying tools from the organizations they had infiltrated. But during the past two months, they have gradually begun attacking the same victims from new servers and have reinserted many of the tools that enable them to seek out data without detection.

They are now operating at 60 to 70 percent of the level they were working at before, according to a study by Mandiant requested by The New York Times.

The Times hired Mandiant to investigate an attack that originated in China on its news operations last fall. Mandiant is not now working for the company.

Mandiant’s findings match those of Crowdstrike, another security company that has also been tracking the group. Adam Meyers, director of intelligence at Crowdstrike, said that apart from a few minor changes in tactics, it was “business as usual” for the Chinese hackers.

The subject of Chinese attacks is expected to be a central issue in an upcoming visit to China by President Obama’s national security adviser, Thomas Donilon, who has said that dealing with China’s actions in cyberspace is moving to the center of the complex security and economic relationship between the two countries.

But hopes for progress on the issue are limited. When the Pentagon released its report this month officially identifying the Chinese military as the source of years of attacks, the Chinese Foreign Ministry denied the accusation, and People’s Daily, which reflects the views of the Communist Party, called the U.S. “the real ‘hacking empire,’” saying it “has continued to strengthen its network tools for political subversion against other countries.”

In a report to be issued Wednesday, a private task force led by Obama’s former director of national intelligence, Dennis Blair, and his former ambassador to China, Jon Huntsman Jr., lays out a series of proposed executive actions and congressional legislation intended to raise the stakes for China.

“Jawboning alone won’t work,” Blair said Saturday. “Something has to change China’s calculus.”

The exposure of Unit 61398’s actions, which have long been well-known to U.S. intelligence agencies, did not accomplish that task.

One day after Mandiant and the U.S. government revealed the PLA unit as the culprit behind hundreds of attacks on agencies and companies, the unit began a haphazard cleanup operation, Mandiant said.

Attack tools were unplugged from victims’ systems. Command and control servers went silent. And of the 3,000 technical indicators Mandiant identified in its initial report, only a sliver kept operating.

Some of the unit’s most visible operatives, hackers with names like “DOTA,” “SuperHard” and “UglyGorilla,” disappeared, as cybersleuths scoured the Internet for clues to their real identities.

In the case of UglyGorilla, Web sleuths found digital evidence that linked him to a Chinese national named Wang Dong, who kept a blog about his experience as a PLA hacker from 2006 to 2009, in which he lamented his low pay, long hours and instant ramen meals.

But in the weeks that followed, the group picked up where it had left off. From its Shanghai headquarters, the unit’s hackers set up new beachheads from compromised computers all over the world, many of them small Internet service providers and mom-and-pop shops whose owners do not realize that by failing to rigorously apply software patches for known threats, they are enabling state-sponsored espionage.

“They dialed it back for a little while, though other groups that also wear uniforms didn’t even bother to do that,” Kevin Mandia, the chief executive of Mandiant, said Friday. “I think you have to view this as the new normal.”

The hackers now use the same malicious software they used to break into the same organizations in the past, only with minor modifications to the code.

While U.S. officials and corporate executives say they are trying to persuade President Xi Jinping’s government that a pattern of theft by the PLA will damage China’s growth prospects — and the willingness of companies to invest in China — their longer-term concern is that China may be trying to establish a new set of rules for Internet commerce, with more censorship and fewer penalties for the theft of intellectual property.

 

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US imperialism threatens war in Korea and targets China

NOVANEWS

Tensions remained high on the Korean peninsula throughout April, due to the massive US-led military exercises, carried out together with their south Korean puppets, aimed at rehearsing a possible invasion and occupation of the socialist Democratic People’s Republic of Korea (DPRK) in the north of the peninsula, as well as a possible nuclear conflict with both the DPRK and China.

The US deployed F-22 stealth war planes to south Korea on 31 March, following two weeks of massive demonstrations of US military firepower, which had included dummy bombing raids by nuclear capable B-52 bombers and B-2 stealth bombers, all this clearly indicating US preparedness to resort to the use of nuclear weapons in the event of any conflict in the region.

B-2 bombers carry 16 B83 nuclear bombs, each with a yield of 1.2 megatons – 75 times the power of the atomic bombs the United States dropped on the Japanese cities of Hiroshima and Nagasaki in 1945. If two B-2 bombers dropped their payloads on north Korea, they would destroy all its large and medium-sized cities.

Furthermore, US B-1 bomber pilots at Dyess Air Force Base in Texas reportedly shifted their training programmes to training for trans-Pacific flights towards targets in East Asia, instead of flights to Afghanistan and the Middle East.

Washington also upgraded a shipment of 60 F-15 fighter planes to south Korea and also sent a large number of Mine-Resistant Ambush-Protected (MRAP) trucks. The newspaperUSA Today indicated that these trucks, used to guard against roadside bombs in US-occupied Afghanistan and Iraq, would “ offer similar protection in north Korea, should US forces need to travel on its roads” – in other words, if US forces sought to invade and occupy the DPRK.

Missile defence targets China

At the same time, the US sent three guided missile destroyers to Korean waters and announced a 50 percent increase in its anti-ballistic missile interceptor systems in Guam and Alaska. Although ostensibly defensive in nature, such missile interceptor systems could, by removing the country’s ability to meaningfully retaliate, potentially leave China at the mercy of a US nuclear first strike.

A recent article entitled ‘War with China’, published in Survival, the magazine of the International Institute for Strategic Studies (IISS), a think tank patronised by and serving the UK’s military and security establishment, sets out some of the calculations in leading US circles regarding the possibility of war with the DPRK or of ‘regime change’.

Written by James Dobbins, a former US assistant secretary of state who currently holds top positions at the RAND think tank, it cites “collapse” in the DPRK as the most likely cause of a war between China and the United States, followed by conflict over Taiwan, cyber war, conflict over control of the South China Sea, and conflicts with India.

Dobbins makes clear that aggressive military operations by the United States, sending forces into the DPRK, is at the heart of any response envisaged by Washington and that it would lead to the distinct possibility of a clash with Chinese forces stationed along the China-DPRK border.

He writes: “The immediate operational concerns for United States Forces-[south]Korea/Combined Forces Command would be to secure ballistic-missile-launch and WMD["weapons of mass destruction"] sites. If any coherent north Korean army remained, it could be necessary to neutralise its long-range artillery; it could be necessary to neutralise its long-range artillery threatening Seoul as well… While south Korea would provide sizeable forces and capabilities for these missions, they would be inadequate to deal with the scope and complexity of a complete north Korean collapse. Substantial and extended commitments of US ground forces would be required to rapidly seize and secure numerous locations, some with vast perimeters .”

Dobbins adds: “The likelihood of confrontations, accidental or otherwise, between US and Chinese forces is high in this scenario.”

US imperialism goes by the playbook

Whilst all these aggressive moves by the US to ratchet up tensions in and around Korea are claimed to be in response to actions by the DPRK, including and following from its third nuclear test in February, on 4 April, mainstream US media, including CNN and the Wall Street Journal, revealed that the Pentagon has all along been following a step-by-step plan, dubbed “the playbook“, drawn up months in advance and approved by the Obama administration earlier in the year.

The flights to South Korea by nuclear capable B-52 bombers on 8 March and 26 March, by B-2 bombers on 28 March, and by advanced F-22 Raptor fighters on 31 March were all part of this pre-arranged script, designed to demonstrate, to the DPRK in the first instance, the ability of the US military to conduct nuclear strikes at will anywhere in North East Asia.

Contrary to lying imperialist propaganda, there is absolutely nothing defensive about any such moves by the US. According to CNN, the “playbook” was drawn up by former defence secretary Leon Panetta and “supported strongly” by his replacement, Chuck Hagel. The plan was based on US intelligence assessments that “there was a low probability of a north Korean military response” – in other words, that the DPRK posed no actual threat, the very opposite of what imperialist governments and mass media have been preaching daily and incessantly for the last several months.

US officials even cynically claimed that Washington would now, following this unprecedented display of US nuclear blackmail step back, due to supposed concerns that American actions and statements “could lead to miscalculations” by the DPRK.

Yet at the same time, Defence Secretary Hagel emphasised the supposed military threat posed by the DPRK, declaring that it presented “ a real and clear danger“. The choice of words was deliberate and menacing, being an echo of the phrase “a clear and present danger” habitually used to justify past US wars of aggression.

British imperialism hitched to the war chariot

British imperialism has also given its full political backing to US imperialism’s war drive in East Asia. Prime Minister David Cameron used a 4 April visit to Scotland to claim it to be a “fact” that the DPRK has the technology to attack both the United States and the United Kingdom with a nuclear missile.

Speaking to workers in the defence industry, Cameron said: “How concerned am I about north Korea? Very concerned, it has extremely dangerous technologies in terms of nuclear and its weapons [sic]… The fact is, as I wrote in a [Daily Telegraph] newspaper article this morning, north Korea does now have missile technology that is able to reach, as they put it, the whole of the United States and if they’re able to reach the whole of the United States they can reach Europe too. They can reach us too, so that is a real concern .”

Even ruling class pundits were quick to nail Cameron’s hyperbole as outrageous lies.

James Hardy, Asia Pacific Editor of Jane’s Defence Weekly, a prestigious establishment publication, commented: “ From what we know of its existing inventory, north Korea has short and medium range missiles that could complicate a situation on the Korean Peninsula (and perhaps reach Japan), but we have not seen any evidence that it has long-range missiles that could strike the continental US, Guam or Hawaii .”

If this seasoned military analyst is correct, then the entire basis on which US imperialism, along with its allies and lackeys, is presently targeting the DPRK is completely spurious.

Mark Fitzpatrick, Director of Nuclear Non-Proliferation and Disarmament at the IISS, and a former official in the George W Bush administration, bluntly told ITN News: “North Koreadoes not have any missile capabilities that could hit Britain, and it is difficult to envision circumstances when north Korea ever would want to attack the UK, even if they could .”

Clearly, besides a craven desire to crawl before Washington, Cameron’s major motivation for his Goebbelsian ‘big lie’ is his wish to preserve the ability of British imperialism to do precisely what he accused the DPRK of contemplating, namely delivering a nuclear strike against its enemies.

Cameron used the mythical threat from the DPRK to argue for maintaining and then replacing Britain’s Trident nuclear submarines. Here he was playing politics as the Conservatives are in favour of a Trident replacement system but are presently in conflict with their Liberal Democrat coalition partners as to whether to maintain a continuous at-sea nuclear “deterrent“, given the huge costs associated with commissioning a new generation of submarines.

Cameron told his audience during a visit to one of the Royal Navy’s Vanguard-class submarines: “I strongly believe we should replace [Trident] on a like-for-like basis. … There are nuclear states and one cannot be sure how they will develop.”

Expanding on his theme, he made clear that his broader political aim is to legitimise the ongoing US aggression against the DPRK, up to and including British support and participation in a possible war. A token British military contingent has in fact been participating in the current military exercises in Korea. Around 1,000 British military servicemen lost their lives in the Korean War of 1950-53.

The Prime Minister said: “ I think the question we need to ask ourselves in the context of this debate about a nuclear deterrent, is what will a country like north Korea be like in 10 years, 20 years, 30 years .” He added: “ To me, having that nuclear deterrent is quite simply the best insurance policy you can have that you will never be subject to nuclear blackmail.”

That, of course, is precisely the conclusion that the DPRK has itself rightly drawn from more than 60 years of constant US imperialist threats of nuclear attack, fully backed by British imperialism. But coming from the mouth of a UK prime minister it reverses black and white. The issue is not what the DPRK, or any other anti-imperialist state, might, completely hypothetically do, three decades from now, but rather the very real nuclear blackmail and warmongering practised by US and British imperialism in the here and now.

Once again, the British ruling class is happily helping to serve up the lies necessary to justify military aggression by US imperialism. The parallels with the claims made by the Labour government of Tony Blair in the run-up to the Iraq war in 2003 are all too obvious – you only need to substitute Cameron for Blair, Kim Jong Un for Saddam Hussein and you have another ready-made ‘dodgy dossier’ designed to make the case for war.

The only difference is that any war on the Korean peninsula would be even more devastating and destructive than the genocidal war waged against Iraq, as it could very easily turn into a nuclear conflict involving not just the DPRK, but also China and quite possibly Russia, too.

Blackmailing Beijing

It is by playing on such very real fears that US imperialism is exerting enormous pressure on China with a view to weakening or severing its historic alliance with the DPRK.

The two major parties of US imperialism are predictably singing from the same hymn sheet in this regard.

On CBS, Republican Senator, and former presidential contender, John McCain of Arizona said: “China can cut off their [the DPRK's] economy if they want to. Chinese behaviour has been very disappointing, whether it be on cyber security, whether it be on confrontation in the South China Sea, or whether it be their failure to rein in what could be a catastrophic situation .”

Democratic Senator Charles Schumer of New York added: “The Chinese hold a lot of cards here. They’re by nature cautious, but they’re carrying it to an extreme. It’s about time they stepped up to the plate and put a little pressure on the north Korean regime.”

Making it crystal clear how the US build up of missile defence systems is intended to blackmail Beijing, US Deputy Defence Secretary Ashton Carter declared: “If north Korea is causing the US and others to take actions which they [the Chinese] find to be the sort of thing that they do not like to see, there is an easy way to address that.”

In fact, a major US upgrade of missile defence systems in California and Alaska, targeting China, was decided by the Obama administration months ago, long before the recent upsurge in tensions with the DPRK.

Nevertheless, this same message has now been carried to Beijing by a succession of high level US visitors, in the space of two weeks, starting with Secretary of State John Kerry. Speaking in the south Korean capital Seoul before arriving in Beijing, Kerry made clear that the US would continue to deploy anti-ballistic and other strategic weapons whose main target can only be China, unless Beijing “put some teeth” into forcing the DPRK to give up its tiny arsenal of nuclear weapons.

After meeting with Chinese leaders, Kerry said the discussion had included “why we have taken the steps that we have taken” in missile defence. “ Now obviously if the threat disappears – i.e. North Korea denuclearises – the same imperative does not exist at that point of time for us to have that kind of robust forward leaning posture of defence ,” he claimed.

The US is aware that China presently accounts for an absolute majority of the DPRK’s foreign trade and supplies nearly all the country’s oil and much of its food. So long as this state of affairs continues, US-led sanctions cannot have a decisive effect on the country.

It is therefore ardently to be hoped that, in their mutual interest, and that of the working and oppressed people of the whole world, both these socialist countries would resist imperialist blackmail and attempts at ‘divide-and-rule’, and would value and safeguard their historic alliance, which was created and nurtured by such outstanding revolutionaries as Comrades Kim Il Sung, Mao Zedong and Zhou Enlai, and which has served both countries so well, and that neither of them would say or do anything that might undermine their traditional revolutionary friendship.

In Britain, the revolutionary working class movement must give its full support to the DPRK in its courageous struggle against nuclear blackmail and threats of US-led aggression and demand:

Hands off Korea!

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Chinese Scientists Slammed for Creating New ‘Deadly’ Influenza Strains

NOVANEWS

 

News that a research laboratory in China is deliberately engineering new hybrid strains of bird-flu virus and human influenza which could cause a pandemic has some experts alarmed.

RT

Lord May of Oxford, former president of the UK’s Royal Society, has denounced the results conducted by a team under Professor Chen Hualan, the director of China’s National Avian Influenza Reference Laboratory.

H7N9, most commonly referred to as bird flu, has been making headlines around the world recently after China confirmed 126 cases which had killed 24 people as of May 1, 2013. That virus, however, has not yet been confirmed to be human-to-human transmissible, which would greatly increase the risk of a pandemic.

That missing leap into human contagion is precisely what scientists as Harbin Veterinary Research Institute in China were interested in experimenting with, which ultimately led that laboratory to produce new viral strains by mixing the H5N1 bird-flu, which can be lethal, but is not easily transmitted between humans, with a 2009 strain of the H1N1 flu virus, which is highly communicable between humans.

According to Lord May, who spoke with The Independent, the experiment represents a breach of safety.

“The record of containment in labs like this is not reassuring. They are taking it upon themselves to create human-to-human transmission of very dangerous viruses. It’s appallingly irresponsible,”
 said May.

The research was conducted by Chen’s team within a laboratory with the second highest security level to prevent the virus escaping containment. According to results published by the periodical Science on Thursday the study produced 127 different viral hybrids among H5N1 and H1N1, five of which demonstrated airborne transmission between guinea pigs test subjects.

According to Chen, the value of what some experts seem to think is an unnecessary risk is to observe these human transmissible strains to head off a potential pandemic.

“High attention should be paid to monitor the emergence of such mammalian-transmissible virus in nature to prevent a possible pandemic caused by H5N1 virus,” Chen told The Independent.

Others viral experts are less than enthusiastic about Chen’s work, however. Professor Simon Wain-Hobson, a prominent virologist at the Pasteur Institute in France, lauded the work, but also questioned its usefulness.

“It’s a fabulous piece of virology by the Chinese group and it’s very impressive, but they haven’t been thinking clearly about what they are doing. It’s very worrying,” said Wain-Hobson to The Independent.

“The virological basis of this work is not strong. It is of no use for vaccine development and the benefit in terms of surveillance for new flu viruses is oversold,” he added.

A similar H5N1 experiment published in March was conducted by virologist Ron Fouchier of Erasmus Medical Centre in the Netherlands. That experiment led scientists to impose a year-long moratorium on hybrid viral experiments due to the belief that safeguards were insufficient for that type of work.

Microbiologist Richard Ebright of Rutgers University, who was critical of Fouchier’s work, was equally skeptical of the Chinese laboratory’s research.

“The sole major difference is the use of guinea pigs in this paper and ferrets in that paper,” said Ebright.

“In my assessment, neither paper contains substantive new information that justifies the risks posed by the research,” he told Wired.

According to Wain-Hobson, hybrid viral experiments such as Chen’s could not, in the end, be extrapolated to determine the danger to humans.

“We don’t know the pathogenicity [lethality] in man and hopefully we will never know. But if the case fatality rate was between 0.1 and 20 per cent, and a pandemic affected 500 million people, you could estimate anything between 500,000 and 100 million deaths,”Wain-Hobson said.

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So Long, Yankees! China And Brazil Ditch US Dollar In Trade Deal Before BRICS Summit

NOVANEWS

China and Brazil agreed to trade in each other’s currencies just hours ahead of the BRICS summit in South Africa.

  • China Brazil
    REUTERS
    Brazilian Minister of Finance Guido Mantega (L) and Chinese Minister of Finance Lou Jiwei smile after signing a memorandum of understanding between the Ministry of Finance of the Republic of Brazil and Ministry of Finance of the People’s Republic of China on Bilateral Cooperation in Macroeconomic, Fiscal and Financial Policies at the 5th BRICS Summit in Durban, March 26, 2013.

The deal, which extends over a three-year period and amounts to an exchange of about $30 billion in trade per year, marks the latest effort among two of the world’s largest emerging economies to shift the dynamics of international trade that have long favored the U.S. dollar.

“Our interest is not to establish new relations with China, but to expand relations to be used in the case of turbulence in financial markets,” Brazilian Central Bank Governor Alexandre Tombini said, Reuters reported.

By shifting some trade away from the U.S. dollar, the world’s primary reserve currency, the two countries aim to buffer their commercial ties against another financial crisis like the one that resulted from the collapse of the U.S. housing market bubble in 2008.

“Trade ties between China and Brazil are of great importance to the two countries’ economies amid global woes and the member states’ economic stability is vital for the BRICS mechanism,” said Zhou Zhiwei, a researcher with the Chinese Academy of Social Sciences, Xinhua reported.

Trade between China and Brazil has exploded in recent years from $6.68 billion in 2003 to over $75 billion in 2012, and in 2009, China replaced the U.S. as Brazil’s main trading partner.

The trade deal comes before a summit of the BRICS nations (Brazil, Russia, India, China and South Africa) in Durban, where the group of five is expected to discuss the establishment of an international development bank.

“BRICS Development Bank will make the global financial sector more democratic,” said Brazil’s Minister for Development, Industry and Foreign Trade Fernando Pimentel,according to Xinhua.

China and has touted the proposed bank as an alternative to international financial institutions like the World Bank, which funds infrastructure and development projects in emerging economies around the world.

With a combined GDP of over $14 trillion, the BRICS is looking to expand its economic influence throughout African countries in particular.

“We are creating new axis of global development,” Anand Sharma, India’s Minister of Commerce, Industry and Textiles, Xinhua reported. “The global economic order created several decades ago is now undergoing change and we believe for the better to make it more representative.”

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‘Russia and China are BRICS’ central pillars’

novanews

RT

 Russian President Vladimir Putin (right) and President Xi Jinping at the signing of a joint statement on deepening mutually beneficial cooperation and relations, a comprehensive strategic partnership of cooperation in the framework of negotiations between the leaders in the Grand Kremlin Palace (RIA Novosti / Sergey Guneev)

Russian President Vladimir Putin (right) and President Xi Jinping at the signing of a joint statement on deepening mutually beneficial cooperation and relations, a comprehensive strategic partnership of cooperation in the framework of negotiations between the leaders in the Grand Kremlin Palace (RIA Novosti / Sergey Guneev)

Economic goals aside, a principle aim of the BRICS is creating a multi-polar world where political change gives the people of member states more clout, professor Shreeram Chaulia told RT.

South Africa is making final arrangements for a summit of the world’s fastest developing economies – known as the BRICS group – which is due to start on Tuesday.

The heads of government of Brazil, Russia, India, China and the host nation South Africa, will convene for a fifth time, with the group being hailed as potential game-changer for the International arena.

Professor and dean of New Delhi-based Jindal School of International Affairs, Shreeram Chaulia says the BRICS has justified its existence, making achievements both on the economic and political fields.

RT: This summit’s us significance is in the fact it concludes the first cycle hosted by all the members. So what’s the group actually achieved in that time?

Shreeram Chaulia: It has grown in political maturity. I would say that from the early days when it was seen as an upstart, was still getting its act together and resolving and ironing out some differences – we have come a long way in five years. The fact that these summits are continuing to be held is silencing some of the critics, who said it was a marriage of convenience or just a short piece item, nothing more. What we are seeing now is that the agenda has quite advanced, especially, in the economic realm. The economic integration between Latin America, Asia and Africa has been spearheaded by this vehicle of the BRICS. And BRICS has become, I would say microcosm of the multi-polar world order. And it’s no small achievement.

RT: The new Chinese leader Xi Jinping has strengthened relations with Russia on his first official visit abroad – to Moscow – will this have any significance on the group? 

SC: Definitely, Russia and China are the central pillars of the BRICS. If you remember they were the originators of the concept and they have in many ways brought along South Africa, India and Brazil to play a larger role. And also Russia and China are much more global in their overall approach towards the world order and trying to transform the world order. The other three I would say are a little more “status quiet”, although they too want to move towards multi-polarity.

So, Russia and China, the fact that the leadership in both countries in emphasizing how this two can become a kind of a steering mechanism, within the five-member group of BRICS and in many ways set the agenda is undeniable. In India, we welcome the fact that Russia is there because it also helps us to overcome any concerns that China will somehow be the only dominant player. Russia and China together – it makes a fabulous combination because these two societies are emerging in a way of leading the pack in terms of the political agenda of this organization.

RT: You’re talking about the impact on the world order, but BRICS are described as an economic group, are you saying they are going to cross to the political line and have influence on the world diplomatic agenda?  

SC: The BRICS represents 43 per cent of the world’s population. This is a huge chunk and they need a political change. People – and not only in the BRICS member countries, put peoples of the rest of the global South – are expecting change and this can’t happen without the political agenda be it in Syria, be it in Egypt, be it in Africa. We need to create multi-polarity. Multi-polarity is a political project. The economic vehicles, I see them as means for a achieving a political goal and end point, which is to create a more just and equitable world order.

RT: Egypt’s also expressed interest in joining the bloc. What would it offer the group, and how attractive would it be to the current Power Five?

SC: I hope they’ll eventually join, but right now the size and current state of the Egyptian economy doesn’t justify it, but eventually it’ll expand because there are more emerging economies and the more the better because that’s how we achieve the multi-polarity through multilateralism.

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China Envoy Says There Was No $8 Billion South Sudan Aid Offer

NOVANEWS

China envoy says there was no $8 billion South Sudan aid offer

by DefenseWeb

China never promised South Sudan $8 billion in development funds when South Sudanese President Salva Kiir visited Beijing in April, but much more than this could be offered if the country achieves lasting peace, a senior diplomat said on Thursday.

South Sudan’s government announced the figure following the trip, and until now Beijing has neither confirmed nor denied it.

Speaking to Reuters in an interview, China’s special envoy to Africa, Zhong Jianhua, who has helped in mediation efforts between the two Sudans and knows both countries well, said there was no $8 billion development deal, Reuters reports.

“If there was any promise, it was that after South Sudan achieves peace with Sudan then it is a very promising country and can ramp up development, and then China is willing to play a development role in South Sudan and help them. But those plans have to wait for peace before we can talk about this,” Zhong said, sitting in a meeting room inside the Foreign Ministry.

“I don’t believe that this is something both sides acknowledged following the visit. This was not mentioned in any of the official Chinese reports following the visit; there was nothing about $8 billion,” he added.

“It’s not impossible – maybe in the future, and maybe not only $8 billion,” Zhong said, without elaborating.

“Certainly, it needs a development plan, and a big one at that. It faces a lot of challenges. I’ve been to Juba many times. Running water, electricity, road lights, bridges — it needs a lot.”

Relations between the two Sudans soured soon after South Sudan achieved independence in 2011 following a long and bloody civil war, due to arguments over oil revenues and territory.

Landlocked South Sudan shut down its 350,000 barrel-per-day crude output in January last year in a row with Sudan over how much it should pay to send the oil through Sudanese pipelines to the Red Sea.

South Sudan said on Tuesday it would be ready to restart oil production within three weeks after finalizing a deal to resolve bitter border and security disputes with Sudan.

China has had to play a delicate balancing act.

It is already the biggest investor in oilfields in South Sudan, through state-owned Chinese oil giants China National Petroleum Corp and Sinopec. Beijing is also one of Sudanese President Omar Hassan al-Bashir’s major supporters.

Zhong said that while he was pleased this week’s agreement had been reached, he remained concerned about the peace process.

“These antagonistic feelings still exist. There are still people who think now is not the time for reconciliation … But the general trend is still progressing in a positive way.”

China would continue to work with the international community to mediate between the two sides, he added.

“President Hu (Jintao) told President Kiir very clearly when he visited that if you want to develop, it will be very hard without peace,” Zhong said.

China’s parliament formally elected Xi Jinping as president on Thursday to replace Hu after 10 years in the job.

Posted in Africa, China0 Comments

China a Military Threat? No Wonder China is Nervous as Obama Pivots

NOVANEWS
Global Research

To read the mainstream Western media, one would conclude that China has become an economic giant now intent on flexing its military muscle and making a massive arms buildup to do so. China’s designated new President, Xi Jinping, has just won both the top Communist party post from predecessor Hu Jintao as well as the head of the powerful Central Military Commission, giving Xi a full takeover of party and armed forces.

A recent BBC analysis, in an article titled “China extending military reach,” is typical of Western media coverage of China’s military program: “China‘s first aircraft carrier will begin sea trials later this year. Late last year, the first pictures were leaked of the prototype of Beijing‘s new “stealth” fighter. And US military experts believe that China has begun to deploy the world’s first long-range ballistic missile capable of hitting a moving ship at sea.“ [1]

In Japan, nationalist politicians like politically ambitious Tokyo Governor Shintaro Ishihara and Toru Hashimoto, the mayor of Osaka, are gaining popularity with anti-China rhetoric and by claiming Japan must develop capacities to oppose Chinese military ascendency. In May the authoritative New York Times ran an alarming story to the effect that China announced a “double-digit increase” in military spending. In the actual text of the article they report an 11% increase over the previous budget, far less than even the rate of inflation.

However, when we examine in detail the actual redeployment and military moves of US Armed Forces in the Asia region following President Obama’s announcement of a new “Asia Pivot” refocus of US military capacities from Western Europe to the Asia region, it becomes clear China is re-acting, in order to attempt to deal with quite real threats to its future sovereignty rather than acting in an aggressive posture.

The mere fact that a standing President, Obama, during nationally televised Presidential debates labeled China as an “adversary” is indicative of the US military posture change. The depth and nature of the US pivot to China is crystal clear when one takes a closer look at the recent developments in an Asian US Missile Defense deployment, clearly aimed at China and no other.

China officially spent barely 10% of what the US does on its defense, some $90 billion, or if certain defense-related arms import and other costs are included, perhaps $111 billion a year. Even if the Chinese authorities do not publish complete data on such sensitive areas, it’s clear China spends a mere fraction of the USA and is starting from a military-technology base far behind the USA.

The US defense budget is not just by far the world’s largest. It dominates everyone else, completely independent of any perceived threat. In the nineteenth century, the British Royal Navy built the size of its fleet according to the fleets of Britain’s two most powerful potential enemies; America’s defense budget strategists declare it will be “doomsday” if the United States builds its navy to anything less than five times that of China and Russia combined.[2]

If we include the spending by Russia, China’s strongest ally within the Shanghai Cooperation Organization, their combined total annual defense spending is barely $142 billion. The world’s ten top defense spending nations in addition to the USA as largest, and China as second largest, include the UK, France, Japan, Russia, Saudi Arabia, Germany, Indiaand Brazil. In 2011 the military spending of the United States totaled a staggering 46% of total spending by the world’s 171 governments and territories, almost half the entire world.[3]

Clearly, for all its rhetoric about peace-keeping missions and “democracy” promotion, the Pentagon is pursuing what its planners refer to as “Full Spectrum Dominance,” the total control of all global air, land, ocean, space, outer-space and now cyberspace.[4] It is clearly determined to use its military might to secure global domination or hegemony. No other interpretation is possible.

China today, because of its dynamic economic growth and its determination to pursue sovereign Chinese national interests, merely because China exists, is becoming the Pentagon new “enemy image,” or adversary, now replacing the no longer useful “enemy image” of Islam used after September 2001 by the Bush-Cheney Administration to justify the Pentagon’s global power pursuit.

After almost two decades of neglect of its interests in East Asia, in 2011, the Obama Administration announced that the US would make “a strategic pivot” in its foreign policy to focus its military and political attention on the Asia-Pacific, particularly Southeast Asia, that is, China.

‘Obama Doctrine’ and Asian BMD

To date the heart of the initial stages of the China Pivot involve building a massive anti-Ballistic Missile Defense ring around Chinato neutralize China’s nuclear strike potential. During the final months of 2011 the Obama Administration clearly defined a new public military threat doctrine for US military readiness in the wake of the US military failures in Iraq and Afghanistan. During a Presidential trip to the Far East, while in Australia, the US President unveiled what is being termed the Obama Doctrine.[5]

The following sections from Obama’s speech in Australia are worth citing in detail:

With most of the world’s nuclear power and some half of humanity, Asia will largely define whether the century ahead will be marked by conflict or cooperation…As President, I have, therefore, made a deliberate and strategic decision — …the United States will play a larger and long-term role in shaping this region and its future…I have directed my national security team to make our presence and mission in the Asia Pacific a top priority… We will preserve our unique ability to project power and deter threats to peace…The United States is a Pacific power, and we are here to stay. Indeed, we are already modernizing America’s defense posture across the Asia Pacific. ..We see our new posture here in Australia…I believe we can address shared challenges, such as proliferation and maritime security, including cooperation in the South China Sea.[6]

On August 24, 2012the New York Wall Street Journal reported that the Obama Administration as part of its newly-announced policy of China Pivot, will expand its missile-defense shield, Ballistic Missile Defense or BMD as it is known in the military, in the Asia-Pacific region. [7]

The official reason given by the Pentagon for its new BMD deployment to the Asian theater is to protect Japan, South Korea and other US allied countries in the region against a North Korean nuclear missile attack. That argument doesn’t stand close scrutiny.

In reality, according to numerous reports, Washington has decided to invest in a major Ballistic Missile Defense network using Japan, South Korea and Australia. The real target of the BMD system is not North Korea, but rather the Peoples’ Republic of China, the only power in the region possessing even a potential nuclear threat with serious long-range delivery capabilities. It is part of the new Pentagon strategy of imposing full control over the future development of China.

The Washington BMD offensive has to be viewed as well in the light of the well-timed Japanese government decision to deliberately provoke tension with China over the disputed Diaoyu Islands in the East China Sea, a region believed to be vastly rich in natural gas reserves.[8]

Part III: Japan Missile Defense Key

In September 2012, Defense Secretary Leon Panetta announced that the United Statesand Japan had reached a major agreement to deploy a second major advanced missile-defense radar on Japanese territory.[9] In his announcement Panetta declared, “The purpose of this is to enhance our ability to defend Japan. It’s also designed to help forward-deployed US forces and it also will be effective in protecting the US homeland from the North Korean ballistic missile threat.”[10] A glance at the map shows the nuclear holes in Panetta’s statement. Chinese missile sites are just across the Korean border, well in range of the US-Japan new BMD installation.

The Washington decision to place advanced BMD infrastructure in Japan was made long ago as part of a US strategy of global military dominance. The BMD cooperation with Japan began in earnest on December 19, 2003, when the Japanese government issued the cabinet decision “On Introduction of Ballistic Missile Defense System and Other Measures.” Ever since, establishing a robust missile defense system has been a Japan national security priority.

Under the current Japanese government’s interpretation of Article 9 of Japan’s Constitution, Japan’s participation in collective self-defense is prohibited, as is using missile defense capabilities to defend a third country–even an ally such as the United States. Shinzo Abe, head of the Liberal Democratic Party, almost certain to become Prime Minister after the December 16 Lower House elections, is a strong advocate of BMD and of changing Article 9. That means we can expect a major shift to a more militant anti-China military posture from Tokyo. [11]

According to US military press accounts, the most important feature of the new Japanese BMD project will be installation of a powerful early-warning radar, ‘X-band’, made by Raytheon Co. It’s “a large, phased-array fire control sensor, featuring precision discrimination and interceptor support,” designed to counter threats from ‘rogue states.’ It will be installed on an unnamed southern Japanese island.[12]

Japan’s defense minister Satoshi Morimoto confirmed that Tokyo and Washington “have had various discussions over missile defenses, including how to deploy the US’s X-Band radar system.” [13] Japan already hosts one X-Band radar in the northern prefecture of Aomori, since 2006. It’s heavily opposed by local residents who fear, not without good reason, that the presence of the radar makes them a target for potential enemy attacks.[14]

BMD across Asia

The US move to prioritize its BMD installation in Asia involves not only Japan. Washington is also helping India improve its new missile defense system. The Indians want to build a multi-layer missile defense network with US help. Publicly India’s government cites Pakistan as the reason. Privately, it’s China. India test-fired its Agni-V intermediate range ballistic missile earlier this year and the Indian press openly cited the system’s ability to strike anywhere in China as the most important feature.[15]

According to Steven Hildreth, a missile-defense expert with the Washington Congressional Research Service, the USA is “laying the foundations” for a region-wide missile defense system that would consist of US ballistic missile defenses combined with those of regional powers, particularly Japan, South Korea and Australia. Although supposedly aimed at containing threats from North Korea, Hildreth also stated, “the reality is that we’re also looking longer term at the elephant in the room, which is China.” According to a report in theWall Street Journal the X-band arc would allow the US to ‘peer deeper’ into China, in addition to North Korea. [16]

As well, there are reports from unnamed US Defense Department officials that a third X-Band radar would be positioned in the Philippines, allowing the Pentagon to accurately track ballistic missiles launched from North Korea but also from large parts of China.[17]

In addition to Japan, Washington has invited South Korea and Australia to join the Asian BMD program. The official Chinese English language daily, Global Times, pointed out, “Among the nuclear powers, China has the smallest number of nuclear weapons. It is also the only country to make a ‘no first use’ commitment. Installing a missile defense system in Asia disrespects China’s nuclear policy.”

The Global Times article notes further, “If Japan, South Korea and Australia join the system, a vicious arms race in Asia may follow. It is not what China wants to see, but it will have to deal with it if the arms race happens. The US is creating waves in Asia. The region may see more conflicts intensify in the future. China should make utmost efforts to prevent it, but prepare for the worst.” [18]

Part V: BMD encourages Nuclear First Strike

The US BMD strategy in Asia follows a decision by the Bush and Obama Administrations to first deploy BMD in a ring surrounding Russia with installations in Poland, the Czech Republic andTurkey, aimed at Russia’s Intercontinental Ballistic Missile arsenal. As prominent retired US military officers have warned, deploying Ballistic Missile Defense against a potential nuclear opponent, whether Russia or China or North Korea or Iran is madness in strict military strategy terms.

With even a primitive missile defense shield, the US could launch a first strike attack against Russian or Chinese missile silos and submarine fleets with less fear of effective retaliation; the few remaining Russian or Chinese nuclear missiles would be unable to launch a response sufficiently destructive.

During the Cold War, the ability of the Warsaw Pact and NATO to mutually annihilate one another had led to a nuclear stalemate dubbed by military strategists, MAD—Mutually Assured Destruction. It was scary but, in a bizarre sense, more stable than what would come with a unilateral US pursuit of nuclear primacy. MAD was based on the prospect of mutual nuclear annihilation with no decisive advantage for either side; it led to a world in which nuclear war had been ‘unthinkable.’

Now the US, with BMD in Europe against Russia and in Asia against China, is pursuing the possibility of nuclear war as ‘thinkable.’ That is really and truly ‘mad.’

The first nation with a ballistic missile ‘defense’ shield (BMD) would de facto have ‘first strike ability,’ making BMD not defensive but offensive in the extreme. Lt. Colonel Robert Bowman, Director of the US Air Force Missile Defense Program during the Reagan era, recently called missile defense, “the missing link to a First Strike.” [19] BMD gives an incentive to make a first nuclear strike, something never before imaginable owing to the lack of certainty one’s nation would not become nuclear radioactive rubble. In military terms, BMD is offensive, not defensive contrary to the name, and should properly be named Ballistic Missile Offense.

Bowman further notes:

Under Reagan and Bush I, it was called the Strategic Defense Initiative Organization (SDIO). Under President Clinton, it became the Ballistic Missile Defense Organization (BMDO). Now Bush II made it the Missile Defense Agency (MDA) and has given it the freedom from oversight and audit previously enjoyed only by the black or top secret programs. If Congress doesn’t act soon, this new independent agency may take their essentially unlimited budget and spend it outside of public and Congressional scrutiny on weapons that we won’t know anything about until they’re in space. In theory, then, the space warriors would rule the world, able to destroy any target on earth without warning. Will these new super weapons bring the American people security? Hardly. [20]

Washington’s major deployment of BMD across Asia is a major reason likely for the sudden decision to delay the 18th Party Congress until after the US elections to see whether China faced a President Romney or President Obama. What has materialized in terms of US military decisions in the few months since Obama first proclaimed his Asia Pivot and Obama Doctrine makes clear why China is increasingly nervous about Obama ‘pivots.’

F. William Engdahl is economist and geopolitical analyst. More about his various books and articles can be found on www.williamengdahl.com

Notes

[1] Jonathan Marcus, China extending military reach, 14 June 2011, http://www.bbc.co.uk/news/world-asia-pacific-13761711

[2] Winslow Wheeler, The Military Imbalance: How The US Outspends the World, March 16, 2012, accessed in http://www.iiss.org/publications/military-balance/the-military-balance-2012/press-statement/figure-comparative-defence-statistics/.

[3] Ibid.

[4] F. William Engdahl, Full Spectrum Dominance: Totalitarian Democracy in the New World Order, 2010, edition.engdahl,Wiesbaden.

[5] President Barack Obama, Remarks By President Obama to the Australian Parliament, November 17, 2011, accessed in http://www.whitehouse.gov/the-press-office/2011/11/17/remarks-president-obama-australian-parliament.

[6] Ibid.

[7]Brian Spegele et al, US Missile Shield Plan Seen Stoking China Fears, The Wall Street Journal, August 24, 2012, accessed in http://online.wsj.com/article/SB10000872396390444082904577609054116070694.html.

[8] Kazunori Takada, Japanese firms shut China plants, US urges calm in islands row, Reuters, September 17, 2012, accessed in http://www.reuters.com/article/2012/09/17/uk-china-japan-idUSLNE88G01A20120917.

[9] Thom Shanker and Ian Johnson, US Accord With Japan Over Missile Defense Draws Criticism in China, The New York Times, September 17, 2012, accessed in http://www.nytimes.com/2012/09/18/world/asia/u-s-and-japan-agree-on-missile-defense-system.html?pagewanted=all

[10] Chris Carroll, USJapan Announce Expanded Missile Defense System, September 17, 2012, Stars and Stripes, accessed in http://www.military.com/daily-news/2012/09/17/us-japan-announce-expanded-missile-defense-system.html

[11] Masako Toki, Missile defense in Japan, Bulletin of the Atomic Scientists, 16 January 2009, accessed inhttp://www.thebulletin.org/web-edition/features/missile-defense-japan

[12] RT, Shield revealed US spreads missile defenses East, Russia Today, 24 August, 2012, accessed inhttp://rt.com/news/us-missile-defense-asia-432/.

[13] Brian Spegele, et al, US Missile Shield Plan Seen Stoking China Fears, Wall Street Journal, August 24, 2012, accessed in http://online.wsj.com/article/SB10000872396390444082904577609054116070694.html

[14] Ibid.

[15] Trefor Moss, Asia’s New Arms Race: Missiles, Missile Defenses,August 27, 2012, accessed in

http://thediplomat.com/flashpoints-blog/2012/08/27/asias-new-arms-race-missiles-missile-defenses/.

[16] RT, op. cit.

[17] Brian Spegele, op. cit.

[18] Global Times, US missile shield fosters Asian arms race, Beijing, Global Times, March 29, 2012, accessed in http://www.globaltimes.cn/NEWS/tabid/99/ID/702623/US-missile-shield-fosters-Asian-arms-race.aspx.

[19] F. William Engdahl, Full Spectrum Dominance: Totalitarian Democracy in the New World Order, edition.engdahl,Wiesbaden, 2009, p. 162.

[20] Ibid., p. 161.

Posted in China0 Comments

China and Russia are Acquiring Gold, Dumping US Dollars

NOVANEWS
By Prof Michel Chossudovsky
Global Research

There is evidence that central banks in several regions of the World are building up their gold reserves. What is published are the official purchases.

A large part of these Central Bank purchases of gold bullion are not disclosed. They are undertaken through third party contracting companies, with utmost discretion.

US dollar holdings and US dollar denominated debt instruments are in effect being traded in for gold, which in turn puts pressure on the US dollar.

In turn, both China and Russia have boosted domestic production of gold, a large share of which is being purchased by their central banks:

It has long been assumed that China is surreptitiously building up its gold reserves through buying local production. Russia is another major gold miner where the Central bank has been purchasing gold from another state entity, Gokhran, which is the marketing arm and central repository for the country’s mined gold production. Now it has been reported by Bloomberg that the Venezuelan Central Bank director, Jose Khan, has said that country will boost its gold reserves through purchasing more than half the gold produced from its rapidly growing domestic gold mining industry.

In Russia, for example, Gokhran sold some 30 tonnes of gold to the Central Bank in an internal accounting exercise late last year. In part, so it was said at the time, the direct sale was made rather than placing the metal on the open market and perhaps adversely affecting the gold price.

China is currently the world’s largest gold producer and last year it confirmed it had raised its own Central Bank gold holdings by more than 450 tones over the previous six years.

Mineweb.com – The world’s premier mining and mining investment website Venezuela taking own gold production into Central Bank reserves – GOLD NEWS | Mineweb

The 450 tons figure corresponds to an increase in the gold reserves of the central bank from 600 tons in 2003 to 1054 tons in 2009. If we go by official statements, China’s gold reserves are increasing by approximately 10 percent per annum.

 

China has risen to now be the largest gold producing nation in the world at around 270 tonnes.The amount bought in by the government initially looks like 90 tonnes per annum or just under, 2 tonnes a week. Before 2003 the announcement by the Chinese central bank that gold reserves had been doubled to 600 tonnes, accounted for similar purchases before that date. Why so small an amount you may well ask? We think local and national issues clouded the central bank’s view as it was the government that bought the gold since 2003 and have now placed it on the central bank’s Balance Sheet. So we would conclude that the government has ensured central bank gold purchasing must continue.

“How will Chinese Central Bank Gold Buying affect the Gold Price short & Long-Term?” by Julian Phillips. FSO Editorial 05/07/2009

Russia

Russia’s Central bank holdings are in excess of 20 million troy ounces (January 2010)

click to enlarge

Russia’s Central Bank reserves have increased markedly in recent years. The RCB reported in May 2010 purchasing 34.2 tons of gold in a single month.

Russian Central Bank Gold Purchases Soar In May – China Too? | The Daily Gold

The diagram below shows a significant increase in monthly purchases by the the RCB since June 2009.

(click on chart to enlarge)

Central Banks in the Middle East are also building up their gold reserves, while reducing their dollar forex holding.

Gold reserves of GCC states is less than 5 percent:

Dubai International Financial Centre Authority economists released a report yesterday calling for local countries to build gold reserves, according to The National.

Despite a high interest in gold, GCC states maintain less than 5 percent of their total reserves in gold. Compared to the ECB, which holds 25 percent of reserves in gold, that leaves a lot of room for growth. http://www.businessinsider.com/gcc-boost-gold-holdings-2010-12#ixzz18FEqpTy3

GCC states should boost their foreign reserve holdings of gold to help shield their billions of dollars of assets from turbulence in global currency markets, say economists at the Dubai International Financial Centre Authority (DIFCA).

Diversifying more of their reserves from US dollars to the yellow metal would help to offer central banks in the region higher investment returns, said Dr Nasser Saidi, the chief economist of DIFCA, and Dr Fabio Scacciavillani, the director of macroeconomics and statistics at the authority.

“When you have a great deal of economic uncertainty, going into paper assets, whatever they may be – stocks, bonds, other types of equity – is not attractive,” said Dr Saidi. “That makes gold more attractive.”

Declines in the dollar during recent months have dented the value of GCC oil revenues, which are predominantly weighted in the greenback.

GCC urged to boost gold reserves

According to a report in People`s Daily;

The latest rankings of gold reserves show that, as of mid-December, the United States remains the top country and the Chinese mainland is ranked sixth with 1,054 tons of reserves, the World Gold Council announced recently.

Russia climbed to eighth place because its gold reserves increased by 167.5 tons since December 2009. The top ten in 2010 remains the same compared to the rankings of the same period of last year. And Saudi Arabia squeezed to the top 20.

Developing countries and regions, including Saudi Arabia and South Africa, have become the main force driving the gold reserve increase. … .

The International Monetary Fund (IMF) and the European central bank are the major gold sellers, and the IMF’s gold reserves decreased by 158.6 tons.

(China’s gold reserves rank 6th worldwide – People’s Daily Online

It should be understood that actual purchases of physical gold are not the only factor in explaining the movement of gold prices. The gold market is marked by organized speculation by large scale financial institutions.

The gold market is characterised by numerous paper instruments, gold index funds, gold certificates, OTC gold derivatives (including options, swaps and forwards), which play a strong role, particularly in short-term movement of gold prices. The recent increase and subsequent decline of gold prices are the result of manipulation by powerful financial actors.

Posted in China, Russia0 Comments

Revisiting alleged 30 million famine deaths during China’s Great Leap

NOVANEWS
Posted by: Sammi ibrahem Sr

by Utsa Patnaik

Thirty years ago, a highly successful vilification campaign was launched against Mao Zedong, saying that a massive famine in which 27 to 30 million people died in China took place during the Great Leap period, 1958 to 1961, which marked the formation of the people’s communes under his leadership. The main basis of this assertion was, first, the population deficit in China during 1958 to 1961 and, second, the work of two North American demographers, A J Coale (Rapid Population Change in China 1952-1982, 1982) and Judith Banister (China’s Changing Population, 1987). No one bothered to look at the highly dubious method through which these demographers had arrived at their apocalyptic figures.

The ‘estimate’ was later widely publicised by Amartya K Sen who built an entire theory, saying that democratic freedom, especially press freedom, in India meant that famine was avoided while its absence in China explains why the world did not know that such a massive famine had taken place until as much as a quarter century later when the North American demographers painstakingly uncovered it.

The capitalist press was happy to reciprocate the compliment by repeatedly writing of “30 million famine deaths,” to the extent that a fiction was established as historical fact in readers’ minds. The London Economist had a special issue on China some years ago, which repeated the allegation of 30 million deaths in three separate articles and refused to publish the Letter to the Editor this author sent contradicting the claim. More recently, in his Introduction to the book Mao Zedong on Practice and Contradiction, which he edited and published in 2006, Slavoj Zizek also mentioned the figure of 30 millions as though it were a given fact. Well known intellectuals have to be taken seriously and the claim examined.

Two routes

There are two routes through which very large ‘famine deaths’ have been claimed – firstly, population deficit and, secondly, imputing births and deaths which did not actually take place. Looking at China’s official population data from its 1953 and 1964 censuses, we see that if the rate of population increase up to 1958 had been maintained, the population should have been 27 million higher over the period over 1959-1961 than it actually was. This population deficit is also discussed by the demographers Pravin Visaria and Leela Visaria. The population deficit was widely equated with ‘famine deaths.’ But 18 million of the people alleged to have died in a famine were not born in the first place. The decline in the birth rate from 29 in 1958 to 18 in 1961 is being counted as famine deaths. The Chinese are a highly talented people, but they have not learnt the art of dying without being born.

There is a basic responsibility that everyone, and more particularly academics, have to be clear and precise about. To say or write that “27 million people died in the famine in China” conveys to the reader that people who were actually present and alive, starved to death. But this did not actually happen and the statement that it did is false.

China had lowered it death rate sharply from 20 per thousand to 12 per thousand between 1953 and 1958. (India did not reach the latter level until over a quarter century later.) After the radical land reforms and the formation of rural cooperatives, there were mass campaigns to clean up the environment and do away with disease bearing pests while a basic rural health care system was put in place. That a dramatic reduction in the rural death rate was achieved, is not disputed by anyone.

During the early commune formation from 1958, there was a massive mobilisation of peasants for a stupendous construction effort, which completely altered for a few years the normal patterns of peasant family life. Women were drawn into the workforce, communal kitchens were established and children looked after in crèches as most of the able-bodied population moved to irrigation and other work sites during the slack season.

We find a graphic description of this period of mass mobilisation in William Hinton’sShenfan. When this author spent three weeks in China in 1983, visiting several communes – which still existed at that time – he was told every time that “we built our water conservation system during the Great Leap.” The birth rate fall from 1959 had to do with labour mobilisation, and not low nutrition since the 1958 food grain output was exceptionally good at 200 million tons (mt).

Holes in the argument

There was excess mortality compared to the 1958 level over the next three years, of a much smaller order. Let us be clear on the basic facts about what did happen: there was a run of three years of bad harvests in China – drought in some parts, floods in others, and pest attacks. Food grain output fell from the 1958 good harvest of 200 mt to 170 mt in 1959 and further to 143.5 mt in 1960, with 1961 registering a small recovery to 147 million tons. This was a one-third decline, larger than the one-quarter decline India saw during its mid-1960s drought and food crisis. Grain output drop coincided in time with the formation of the communes, and this lent itself to a fallacious causal link being argued by the academics who were inclined to do so, and they blamed the commune formation for the output decline. One can much more plausibly argue precisely the opposite – that without the egalitarian distribution that the communes practised, the impact on people of the output decline, which arose for independent reasons and would have taken place anyway, would have been far worse. Further, without the 46,000 reservoirs built with collective labour on the communes up to 1980, the effects of later droughts would have been very severe. Recovery to the 200 million ton level took place only by 1965. Throughout, however, the per capita food grain output in China even during the worst year, 1960, remained substantially above that in India.

As output declined from 1959, there was a rise in the officially measured death rate from 12 in 1958 to 14.6 in 1959, followed by a sharp rise in 1960 to 25.4 per thousand, falling the next year to 14.2 and further to 10 in 1962. While, clearly, 1960 was an abnormal year with about 8 million deaths in excess of the 1958 level, note that this peak official ‘famine’ death rate of 25.4 per thousand in China was little different from India’s 24.8 death rate in the same year which was considered quite normal and attracted no criticism. If we take the remarkably low death rate of 12 per thousand that China had achieved by 1958 as the benchmark, and calculate the deaths in excess of this over the period 1959 to 1961, it totals 11.5 million. This is the maximal estimate of possible ‘famine deaths.’ Even this order of excess deaths is puzzling given the egalitarian distribution in China, since its average grain output per head was considerably above India’s level even in the worst year, and India saw no generalised famine in the mid-1960s.

Ideological bias

Relative to China’s population, this figure of plausible excess mortality is low and it did not satisfy the academics in northern universities who have been always strongly opposed to socialised production. Coale’s and Banister’s estimates gave them the ammunition they were looking for to attack the communes. How exactly do Coale and Banister reach a figure of ‘famine deaths’ which is three times higher than the maximal plausible estimate? Examining carefully how they arrived at 30 million ‘famine deaths’ estimate, we find that the figure was manufactured by using indefensible assumptions, and has had no scholarly basis.

In the 1982 census, there was a survey on fertility covering one million persons or a mere 0.1 per cent sample of the population, who were asked about births and deaths from the early 1950s onwards. The very high total fertility rate obtained from this 1982 survey is used by them to say that millions more were actually born between the two census years, 1953 and 1964, than were officially recorded. They ignore the birth rate of 37 per thousand derived from a very much larger 1953 sample which had covered five per cent of all households and was specially designed to collect the information on births and deaths used in the official estimates. Instead, they impute birth rates of 43 to 44 per thousand to the 1950s, using the 1982 survey. There is no justification for such an arbitrary procedure of using a much later reported high fertility rate for a long distant past. We know that a distant recall period makes responses inaccurate. These imputed extra births between 1953 and 1964 total a massive 50 million but according to them did not increase by an iota the 1964 population total, 694.6 million, the official figure which they assume as correct. Thus, although all official birth and death rates are rejected by them, the official population totals are accepted. This opportunistic assumption is clearly necessary for their purpose because it allows them to assert that the same number of extra people died between 1953 and 1964, as the extra people they claim were born.

Fallacious claims

But the demographers are still not satisfied with the 50 million extra births and deaths that they have conjured up. Fitting a linear time trend to the falling death rate of the early fifties is done to say that deaths should have continued to decline steeply after 1958 and since it did not, the difference from the trend meant additional ‘famine deaths.’ Such straight-line trend fitting is a senseless procedure since the death rate necessarily shows non-linear behaviour. It cannot continue falling at the same steep rate; it has to flatten out and cannot reach zero in any population – not even the inimitable Chinese people could hope to become immortal. The final estimate of extra deaths in both authors is raised thereby to a massive 60 million, a heroic 65 per cent higher than the official total of deaths over the inter-censal period.

Having created these 60 million extra deaths at their own sweet will out of nothing, the authors then proceed to allocate them over the years 1953 to 1964, arbitrarily attributing a higher portion to the great leap years in particular. The arbitrariness is clear from the variation in their own manipulations of the figures. Coale’s allocation raises his peak death rate in 1960 to 38.8 per thousand while Banister is bolder and raises it to 44.6 compared to the official 25.4 for that year, and 30 million ‘famine deaths’ are claimed over the Great Leap years after all this smart legerdemain [sleight of hand]. Having violated every tenet of reason, these ‘academics’ may as well have allocated all their imaginary deaths to the Great Leap years and claimed that 60 million died – why hang themselves only for a lamb rather than for a sheep! Seldom have we seen basic norms of academic probity and honesty being more blatantly violated, than in this travesty of statistical ‘estimates.’ And seldom have  noted intellectuals, who might have been expected to show more common sense, shown instead more credulous naiveté and irresponsibility, by accepting without investigation and propagating such nonsensical ‘estimates,’ giving them the status of historical fact. In the process, they have libelled and continue to libel Mao Zedong, a great patriot and revolutionary. They have unwittingly confirmed the principle attributed to Goebbels – that a lie has to be a really big lie and be endlessly repeated; then it is bound to be believed.

Thirty million or three crores is not a small figure. When one million people died in Britain’s colony, Ireland, in 1846-47, the world knew about it. When three million people died in the 1943-44 Bengal famine, the fact that a famine occurred was known. Yet 30 million people are supposed to have died in China without anyone knowing at that time that a famine took place. The reason no one knew about it is simple, for a massive famine did not take place at all. The intellectuals who quote the massive famine deaths figure of 30 million today, are no doubt outstandingly clever in the small, im kleinen, but are proving themselves to be rather foolish im grossen, in the large. A person has to be very foolhardy indeed to say that 30 million people died in a famine without anyone including the foreign diplomats in China and the China-watchers abroad having the slightest inkling of it. And those who credulously believe this claim and uncritically repeat it show an even greater folly than the originators of the claim.

With thanks to People’s DemocracyVol. XXXV, No. 26, June 26, 2011, Weekly Organ of the Communist Party of India (Marxist)

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