WSJ  | Jan 1, 2010

By J.R. WU

BEIJING — China’s Purchasing Managers Index rose again in December, the ten straight month of expansion in manufacturing activity.

The index rose to 56.6 in December from 55.2 in November, the China Federation of Logistics and Purchasing said Friday. A PMI reading above 50 indicates growth, while a reading below 50 indicates contraction.

Key activities of employment, imports and new orders grew, while new export orders fell, although they remained above the expansionary threshold, according to the federation’s data, which compiles the views on the PMI’s 11 component subindexes from more than 700 enterprises in China.

The PMI data suggest China’s economic growth rate in the fourth quarter of 2009 may have been its highest since the onset of the global financial crisis in late 2008.

The December reading shows China’s economic rebound continues to consolidate, but it may still be too soon to be overly optimistic about the trend, said PMI analyst Zhang Liqun in the federation’s statement.

Of the 11 categories that compose the PMI, nine rose, one fell, and one was unchanged in December compared with November.

The new export orders component, an indication of future exports, fell to 52.6 in December from 53.6 in November, the federation said.

Among components that rose, employment reached 52.2 last month, compared to November’s 51.1, while at the same time new orders were up, at 61.0 from 58.4.

The imports component also rose slightly, to 52.5 in December from 52.2 in November. Output was up at 61.4 last month, compared to 59.4 in November.

The federation’s PMI is the first of China’s economic indicators issued every month. China will issue data for its fourth-quarter gross domestic product and other December economic indicators later this month. The country’s quarterly economic year-on-year growth has been steadily rising since the start of 2009, boosted by massive stimulus measures.

Photo: Bobby Yip/Reuters

Book Review:

WHEN CHINA RULES THE WORLD: The End of the Western World and the Birth of a New Global Order By Martin Jacques

NY Times | Dec 31, 2009

Waking Dragon

By JOSEPH KAHN

Historians may someday debate whether the financial crisis that began a year ago is most notable for how much damage it did to the United States, or how little it inflicted on the world’s major rising power, China. Helped by huge state intervention and buoyant optimism almost surreally undiminished by the crisis of confidence across the Pacific, China has had a very good downturn. It is closing the gap with the world’s most developed economies faster than anticipated and could overtake Japan as the world’s second-largest economy when the final figures for last year are tallied.

China’s already rapid emergence is changing many things, from diplomatic alliances in Africa to the status of the dollar as the world’s favorite currency. It may also open minds to a provocative thesis that, until a short time ago, might have been dismissed as breathless hyperbole.

Related

New order: A stimulating yet ultimately flawed portrait of a China-dominated world

In “When China Rules the World,” Martin Jacques, a columnist for The Guardian of London and a visiting scholar at the London School of Economics, argues that China will not just displace the United States as the major superpower. It will also marginalize the West in history and upend our core notions of what it means to be modern.

This bold assertion, he acknowledges, rests on the assumption that nothing will derail the political stability and economic dynamism China enjoys today. It is not clear that even the most senior leaders in Beijing share Jacques’s faith in that forecast. But the future is unknowable, and his extrapolations are, if not provable, at least plausible. The strength of his book lies in his exhaustive, incisive exploration of possibilities that many people have barely begun to contemplate about a future dominated by China.

Much of the journalism and many of the best-selling books on China treat the country’s rise as an economic phenomenon. It is presented as a developing country, albeit the biggest one, that has opened its doors to the West, allowed a Western-style market economy to flourish and exported goods to wealthy consumers abroad. Those things are true. But Jacques argues that the focus on the economic side of the story has lulled the West into a false sense of security. “The mainstream Western attitude has held that, in its fundamentals, the world will be relatively little changed by China’s rise,” he writes. Rather, he says, “the rise of China will change the world in the most profound ways.”

Unlike Britain, the United States or Germany at various times during the past 200 years, China is not emerging on the world stage as a new, powerful nation-state. It is, instead, as one Chinese writer put it, regaining “lost international status,” becoming the first ancient civilization to re-emerge and reclaim its position as a dominant power.

China was the wealthiest, most unified and most technologically advanced civilization until well into the 18th century, Jacques points out. It lost that position some 200 years ago as the industrial revolution got under way in Europe. Scholars once viewed China as having crippling social, cultural and political defects that underscored the superiority of the West. But given the speed and strength of China’s recent growth, those defects have begun to look more like anomalies. It is the West’s run of dominance, not China’s period of malaise, that could end up being the fluke, Jacques writes.

Skyscrapers and stock markets in China look like those in the West, of course. But Jacques argues that the country’s cultural core resembles ancient China far more than it does modern Europe or the United States. It is accumulating wealth much faster than it is absorbing foreign ideas. The result, he says, is that China is nearly certain to become a major power in its own mold, not the “status quo” power accepting of Western norms and institutions that many policy makers in Washington hope and expect it will be.

Joseph Kahn is a former Beijing bureau chief and now a deputy foreign editor of The Times.

Full Story

Politics in 2009: Arroyo Regime Brought Philippines Deeper Into Crisis

Bulatlat.com | Dec 31, 2009

By BENJIE OLIVEROS

MANILA — The Arroyo administration is, hopefully, about to end its term by the middle of next year. Lasting for nine years and a half, it is the longest-running presidency since the Marcos dictatorship. In fact, Gloria Macapagal-Arroyo is second only to Ferdinand E. Marcos who, for 20 years, held the reins of power the longest in the country’s history. But the similarities between the Marcos dictatorship and the Arroyo government do not end with them having the longest terms.

They both grabbed power when the country, and the world, was in deep economic crisis. By Marcos’s second term, in 1969, the world was moving toward a deep economic crisis, which resulted in the US being the world’s biggest debtor from being its biggest creditor. The value of the dollar plunged, thereby causing the devaluation of all currencies tied to it, such as the Philippine peso. The turn of the decade signaled a shift from the World War II-era Keynesian economics to neoliberal economics, or what we now call globalization, which is actually a drive to fully open up the economies of underdeveloped countries to foreign trade and investments. This pushed the Philippines deeper into economic crisis such that Marcos had to declare martial law to keep himself in power because the Filipino people’s protest actions were intensifying since the “First Quarter storm” of 1970. At the same time, the contradictions between the ruling elite was also worsening with the opposition led by the late senator Benigno Aquino Jr. and erstwhile Marcos ally, the late vice president Fernando Lopez, denouncing Marcos and his corrupt practices.

When Arroyo was catapulted to power via People Power II in 2001, the world was also being rocked by a crisis. The US, which until March 2000 was the only country that seemingly was shielded from the crisis, was already reeling from the bursting of the “high-tech or dot-com bubble.” The Filipino people, already feeling the effects of the crisis, were moved to action because of former president Joseph Estrada’s brazen display of profligacy amid the worsening poverty. The ruling elite was also hopelessly divided, with Arroyo, who was then vice-president, joining the opposition a few months before Estrada’s ouster.

While both Marcos in the 1970s and Arroyo in 2001 promised to usher in a new government that would supposedly benefit the people, the Marcos and Arroyo regimes pushed the country deeper into crisis.

By the end of the Marcos dictatorship the country was deeply indebted, prices were skyrocketing, unemployment and poverty had reached new highs, and all institutions of government were warped by the unbridled power and corruption under martial law. “Never again to martial law” became the people’s rallying call.

Also, by the end of the dictatorship, the divisions within the ruling elite were even deeper as manifested by the series of coups d’ etat that the Aquino government had to face and the unprecedented number of presidential aspirants — seven — during the 1992 elections. Another sign of the worsening political and economic crisis then was the increasing strength of the Communist Party of the Philippines-New People’s Army-National Democratic Front of the Philippines (CPP-NPA- NDFP).

Now that the Arroyo government is about to end (hopefully), prices have reached new highs in spite of the low inflation rates reported by the government; the country is experiencing the longest-running high unemployment and underemployment rates: as of July 2009, there are 4.3 million unemployed, 7 million underemployed, and 20.3 million either in “unpaid family work” (3.8 million), “own account” (12 million), and non-regular wage and salary workers (4.5 million); and the country is about to confront another round of fiscal crisis in 2010 with the deficit expected to reach P293 billion as per Finance Secretary Margarito Teves’s estimate. It could be remembered that the first fiscal crisis under the Arroyo government occurred in 2002 prompting Arroyo to promise, on Rizal Day, that she would not run again — a promise that she, of course, did not fulfill. Poverty has also worsened.

All institutions of government have likewise been warped by the impunity in corruption and bribery, electoral fraud, attacks on civil liberties and political killings. The Arroyo government has recorded the second highest number of extrajudicial killings at 1,118, second only to Marcos, and the third highest in enforced disappearances at 204. The Aquino government had the most number of enforced disappearances at more than 600 and the Marcos dictatorship second. However, only the Arroyo government has, as part of its counterinsurgency program Oplan Bantay Laya, clearly targeted legal political activists for “neutralization”. Marcos’s record of preemptively arresting leaders of activist organizations prior to planned protests actions pales in comparison to the Arroyo policy of subjecting all legal political activists to harassments, killings and abductions. The country may not be under martial law but it has become the most dangerous place for journalists. If the Arroyo government had its way — without the Filipino people protesting — civil liberties could have been severely constricted by now. She did try to experiment with martial law in Maguindanao but it was met by protests from a broad segment of society even as everybody feels the need for swift justice for the Amptuan massacre.

The divisions within the ruling elite have likewise deepened as manifested by the extreme isolation of the Arroyo government, the restlessness within the ranks of the Armed Forces of the Philippines (AFP) and Philippine National Police (PNP), and the six-cornered fight for the presidency. The Ampatuan massacre has raised the level of barbarity in Philippine politics. Arroyo’s fear of stepping down from power — thus her attempts at charter change and her bid for a Congress seat — is also a manifestation that the contradictions within the ruling elite have sharpened so much that she no longer feels secure after May 2010. Also, the strength of the CPP-NPA-NDFP has continued to grow despite Arroyo’s desperate militarist efforts to put an “end to the insurgency.”

While it would take more than a change in president to effectively address the worsening economic and political crisis, if Arroyo and her minions are able to get away with keeping themselves in power — by declaring a failure of elections, martial law, or charter change — the Filipino people would sink faster and deeper into the quagmire of backwardness and poverty.

economictimes.indiatimes.com | Dec 20, 2009

LONDON: London to New York by train? Well, it may seem unbelievable, but if Russia’s plans to link Europe and the US by rail materialises, it would fire the imagination of every traveller.

In fact, dreams of travelling from London to New York by train were evoked after the state-run Russian Railways has pledged a crucial tunnel linking the country to North America will be “feasible” in 10 years, the ‘Sunday Express’ reported.

Vladimir Yakunin, the President of Russian Railways and Prime Minister Vladimir Putin’s close confidant, said that the aim was to connect more than half of the planet by train.

He said American investors had already approached him about boring a 64-mile tunnel under the famous Bering Sea that separates Asia and North America. “We are the promoters of an West-East corridor. There’ll soon be renaissance of railways.”

Though the 9,000-mile train journey could take up to three weeks, it will definitely be one of the world’s most exhilarating trips.

In fact, its crowning glory would be the much longed-for tunnel under the Bering Sea, a project first dreamt up by Tsar Nicholas II a century ago and which would unify the two Cold War enemies at a cost of some 10 billion pounds.

Yakunin said engineers had been looking at the 31-mile Channel Tunnel as the template although the new venture would face far greater challenges including boring through the two islands in the middle of the straits.

He said: “We are very interested in the technology of Channel Tunnel and we are looking at the possibility of a tunnel under the Bering Sea.

“Already some representatives from some funds in the United States have come to me about my ambition to run trains from Russia to the US. We could link up half the world. It’s possible and it may be feasible within 10 years.”

AFP | Dec 4, 2009

WASHINGTON — US Secretary of State Hillary Clinton on Friday voiced cautious hope that France would come up with more troops in Afghanistan as part of the new US-led strategy.

Clinton, who was in Brussels for a meeting of NATO foreign ministers, said the transatlantic military alliance’s chief, Anders Fogh Rasmussen, had hinted that France may be weighing additional support for Afghanistan.

“I don’t know that, other than to look at the strong verbal support that the French have given us,” Clinton said in an interview from Brussels with US public television network PBS.

“They do have significant numbers there now, but we hope that they will come forward.”

France has 3,300 troops in Afghanistan and has welcomed the new US strategy on Afghanistan. But Foreign Minister Bernard Kouchner has said there was no need to adjust France’s troop levels.

President Barack Obama laid out a plan Tuesday to send 30,000 more US troops to Afghanistan but also to start pulling out forces in 2011.

Washington called on European allies and partners fighting alongside US troops in Afghanistan to find 5,000 to 7,000 soldiers to swell their ranks.

NAU Resistance | Nov 30, 2009

By Dana Gabriel

Although some may have viewed President Barack Obama’s recent Asian trip as uneventful and perhaps unsuccessful, he appears to have recommitted to the principles of globalization as the answer to the world’s economic woes. Obama declared his intentions for the U.S. to be fully engaged in Asia economically, politically, and in areas of security. He announced that America would join negotiations for a Trans-Pacific deal. This could be used as an opportunity for the U.S. to reassert its leadership in regards to trade initiatives and might also serve as a stepping stone for a larger free trade agreement.

The recent Asia-Pacific Economic Cooperation (APEC) Summit was held in Singapore and marked its 20th anniversary. It brought together world leaders, foreign, finance and trade ministers, along with other delegates from its 21 member nations. APEC was founded to promote greater trade and integration in the region, but its scope has expanded to include environmental, climate change, energy, as well as other issues. In a Statement by APEC Leaders, they agreed to a new growth paradigm for the Asia-Pacific region, endorsed the goals of the G20 Framework and rejected protectionism. The Leaders, “launched a pathfinder initiative led by Australia, Canada, Japan, Korea, New Zealand, Singapore, and the United States to practice self-certification of origin so that businesses can better take advantage of free trade agreements in the region.” This is in an effort to cut costs for exporters and further boost trade. APEC Leaders also agreed to, “continue to explore building blocks towards a possible Free Trade Area of the Asia-Pacific in the future.”

While on his eight-day Asian tour, which included stops in Japan, Singapore, China, as well as South Korea, President Obama recommitted to the Trans-Pacific Partnership (TPP). It was President George W. Bush who first pledged U.S. participation in the TPP. The trade deal was put on hold pending a review of U.S. trade policy. A government fact sheet describes the TPP as a, “potential platform for economic integration across the Asia Pacific region. The United States will engage with an initial group of seven like-minded countries, Singapore, Chile, New Zealand, Brunei, Australia, Peru, and Vietnam, to craft a platform for a high-standard, comprehensive agreement – one that reflects U.S. priorities and values – with these and additional Asia-Pacific partners.” Australia will host TPP negotiation sessions in March of next year and a trade treaty could be in place by 2011. Many nations in the region are already bound by various regional and bilateral trade agreements. Expanding the TPP would further distinguish it as the only regional free trade agreement that spans both sides of the Pacific, linking Asia with the Americas. It could also gradually evolve into an Asia-Pacific free trade zone and include APEC members, as well as other nations. Such an undertaking is seen as years away, but U.S. participation in the TPP could speed up such plans.

The United States Trade Representative website reported that after the APEC Summit, “USTR staff and their TPP country counterparts met to discuss work that would need to be done to develop proposals to fill gaps in previous trade agreements and to shape a 21st century trade agreement. These discussions will inform consultations with Congress and with stakeholders about how best to move forward on TPP.” In his article above referenced, Jim Capo noted that, “For the US to undertake negotiations for a trade agreement Congress has first to grant approval to start specific negotiations, and has also to grant Trade Promotion Authority to enable the Executive to conclude the negotiations and put an agreement to Congress with a yes or no vote, without amendments.” He goes on to say that, “There has been no formal Congress approval of TPPA negotiation, President Bush’s Trade Promotion Authority has also expired in March 2007. This means the current US administration has no approval to start negotiation and no authority to conclude them.”

Ahead of the APEC Summit, Australian Prime Minister Kevin Rudd proposed an Asia-Pacific Community by 2020. The regional group would be based on the European Union-style model. It would go beyond APEC and encompass not only economic, but political and security issues. In October of this year, Republican Senator Richard Lugar announced his intentions to introduce legislation aimed at negotiating a free trade agreement with the Association of South East Asian Nations (ASEAN). The first ASEAN-U.S. Leaders meeting was held in Singapore on November 15. In a Joint Statement the U.S., “welcomed ASEAN’s plans to achieve an ASEAN Community by 2015 based on the ASEAN Charter, and reaffirmed its commitment to support those plans.” ASEAN and the U.S. also agreed to hold a second Leaders meeting in 2010.

On his Asian trip, Obama emphasized the need to strengthen old alliances as well as build new partnerships in the region. He said, “the growth of multilateral organizations can advance the security and prosperity of the region.” He also added, “As an Asia-Pacific nation the United States expects to be involved in the discussions that shape the future of this region and to participate fully in appropriate organizations as they are established and evolve.” In his article above referenced, Jim Capo noted that, “The Trans-Pacific Partnership Agreement is the sister agreement to the Trans-Atlantic Agenda. Together with NAFTA and the North American Leaders Summit (new name for the discredited SPP), these deals are building blocks for an integrated system of global governance managed by Western financial interests and their collaborators around the world.”

Dana Gabriel is an activist and independent researcher. He writes about trade, globalization, sovereignty, as well as other issues.

Contact:beyourownleader@hotmail.com
Visit his blog site at: beyourownleader.blogspot.com

“A world government is the only solution to world problems, such as climate change.”

Francesco Stipo, Ph.D. Director of the USA Club of Rome, will present his book “World Federalist Manifesto. Guide to Political Globalization” in a Luncheon at the National Press Club in Washington D.C.

MMD Newswire | Nov 16, 2009

Washington, D.C. (MMD Newswire) November 18, 2009 — The “World Federalist Manifesto” deals with the United Nations reform and the development of an international organization that will represent world nations as a whole and will be able to deal with the global challenges of the new millennium. The “Club of Rome” is a think tank that in 1972 published the report “Limits to Growth”, which sold over 12 million copies worldwide.

The author analyzes different projects of reform of the United Nations.

“The United Nations can’t offer effective solutions because it doesn’t reflect the political and economic balances of world nations. In the General Assembly, a nation like Nauru that contributes just 0.001% of the U.N. budget has the same voting power of a nation such as the United States that contributes 22% of the U.N. budget” Francesco Stipo says. “The General Assembly needs to be reformed to reflect the political and economic balances of world nations”.

World Federalist Manifesto. Guide to Political Globalization

In case the U.N. cannot be reformed, the author calls for an alternative to the United Nations, a new international organization formed by NATO members. “NATO countries have similar economies and are based on democratic political systems” Dr. Stipo says. “The abatement of economic tariffs for countries in the NATO area would create a large free trade area supported by a common military structure. Other countries would be allowed to join once they meet certain economic criteria and they are founded on democratic principles. Such an organization would eventually substitute the role of the United Nations”.

“The economic downturn could have been prevented by a coordinated action of central banks and international regulatory bodies such as the Bank for International Settlements, the World Bank, the IMF, the WTO and the U.N. Economic and Social Council” the author says. “However, such coordination does not exist and global solutions cannot be implemented.” The “World Federalist Manifesto” calls for a centralization of the U.N. system and a better coordination of the work of the specialized agencies under the direction of the Secretary General. The book proposes that the different agencies (such as the FAO or WWF) assume the legal nature of Ministries, such as the International Department of Agriculture or the International Department of Environmental Protection).

The author adds that “a world government is the only solution to world problems, such as climate change and the global economic crisis. A world confederation that respects the sovereignty of world nations and that deals with the issues of international economy that cannot be dealt by one nation alone”.

The book “World Federalist Manifesto. Guide to Political Globalization” is available in Barnes & Noble and in the website www.worldfederalistmanifesto.com.

About the Author

Francesco Stipo is Director of the United States Club of Rome. He holds a Ph.D. in International Law and a Master Degree in Comparative Law from the University of Miami. He has been practicing international law since 1999 and worked as a foreign law advisor and of counsel for European and American law firms.

He is the author of “World Federalist Manifesto. Guide to Political Globalization” and “United Nations Reorganization. The Unification of the U.N. System”. He also is the author of “The Balanced Contribution Theory”. In March 2008 he gave a speech at the United Nations on U.N. Reform. Dr. Stipo is an active member of the National Press Club in Washington D.C.

CONTACT: Dr. Francesco Stipo (Director USA Club of Rome)
LOCATION: National Press Club – Washington D.C.
PHONE: (1) 305-867-9653
E-Mail: fstipo@hotmail.com

WEB SITE: www.worldfederalistmanifesto.com

President Barack Obama (2nd R) attends a State Dinner Reception with China’s National People’s Congress Chairman Wu Bangguo (L) and Chinese President Hu Jintao (2nd L) at the Great Hall of the People in Beijing, November 17, 2009. REUTERS/Jim Young

seattletimes.nwsource.com | Nov 17, 2009

by Jon Talton

Top of the News: More than ever, expectations are low for President Obama’s trip to China. With China (and even the EU) pulling out of the great recession faster than America, and with China holding trillions in American debt, what is there to talk about?

Plenty, of course. And wouldn’t you love to be a fly on the wall if the president brings up China’s currency manipulation, intellectual property, protectionism — especially in sustainable energy — and its looming environmental crash. Instead, from reports I’ve read, he’s explaining to our Chinese lenders “in detail” how health care legislation would affect the budget deficit. That’s what happens when you’re the debtor. A new world order.

Better numbers from China don’t translate into a restart of the great American consumer engine. And Chinese policies help stifle American exports. West Coast ports are still suffering — although Seattle and Tacoma are not as vulnerable as the mega-port of LA-Long Beach. China and Asia are still buying Washington wheat. Still, Obama’s warning to Asia that it can’t count on American consumers as it has in the past may be the most important, and undercovered, aspect of this trip.

In this Oct. 29 2009 file photo, Belgium’s Prime Minister Herman Van Rompuy participates in a meeting prior to an EU summit in Brussels. Very soon, Europeans from Denmark to Bulgaria will wake up to the reality of having their very first president, one person world leaders can call when they want to talk to Europe. AP Photo

“New resources will be necessary for the financing of the welfare state. Green tax instruments are a possibility.”

Top candidate debates EU tax at elite dinner

EU Observer | Nov 16, 2009

by ANDREW RETTMAN

Belgian Prime Minister Herman Van Rompuy, a top candidate for the new European Union president job, laid out his views on future EU financing at a dinner of the secretive Bilderberg group last week.

The event took place at Val Duchesse, a former priory on the outskirts of Brussels, on Thursday (12 November), with guests including Belgian industrialist and Bilderberg chairman Etienne Davignon, former US secretary of state Henry Kissinger and luminaries from the worlds of international politics and business, according to Belgian broadsheet De Tijd.

The Belgian leader is reported to have said in a speech that: “New resources will be necessary for the financing of the welfare state. Green tax instruments are a possibility, but they are ambiguous: This type of tax will eventually be extinguished. But the possibilities of financial levies at European level must be seriously examined and for the first time the large countries in the union are open to that.”

Mr Van Rompuy’s official spokesman later told the Belga news agency that: “The Prime Minister … indicated that it is necessary to carry on thinking about structural financing at the European level.”

The leak to De Tijd, coming just days before the EU aims to choose its first permanent president, could damage Mr Van Rompuy’s chances.

Proposals about imposing fees on environmentally-damaging behaviour or skimming small levies off financial transactions have been mooted before. But the suggestion that the new EU president might interfere in national taxation policy is anathema to anti-federalists in EU countries such as the UK or Denmark.

Mr Van Rompuy’s participation at the Bilderberg dinner will also give ammunition to critics of the EU top job selection process, which takes place via confidential consultations between EU leaders and informal social events.

The Bilderberg group is an elite club of aristocrats, politicians and businessmen dating back to 1954, which likes to meet away from the public eye and which is widely disliked by pro-transparency campaigners.

EU parliament chief shows his cards

Meanwhile in a related development, European Parliament President Jerzy Buzek over the weekend backed former Spanish leader Jose Maria Aznar to take the EU president post.

“As far as I know, Aznar is not currently interested in this kind of position. But I think it would be good for the EU if he changed his mind and submitted his candidature,” Mr Buzek told Spanish daily ABC in an interview published on Saturday.

Mr Buzek met Mr Aznar along with the current Spanish government on a trip to Madrid ahead of Spain taking up the rotating EU presidency in January.

The conservative Spanish politician is from the correct political family according to the prevailing wisdom that the centre-right will take the EU president job while the centre-left will take the EU foreign minister position. But he was a firm advocate of the Iraq war, which remains a highly-divisive topic in the EU.

The speculation is set to see an end on Thursday (19 November) when EU leaders gather in Brussels to decide the top appointments. Other names in line for the presidency post include Dutch leader Jan Peter Balkenende and his Luxembourg counterpart, Jean-Claude Juncker.

Tourists are reflected in the window of a shop displaying shirts and pouches bearing an image U.S. President Barack Obama’s face imprinted over that of China’s late leader Mao Zedong, in the popular tourist area of Houhai in central Beijing September 21, 2009. Obama, who will visit Shanghai and Beijing for the first time on Nov. 15-18, spent much of his childhood in Hawaii, five time zones away from Washington, D.C. ; and beginning in 1967, when he was six years old, he lived in Jakarta for four years. Although U.S. President Barack Obama has never set foot there, China cast a long shadow in the Pacific region where he grew up. Picture taken September 21, 2009. To match Special Report CHINA/USA. Reuters Pictures

The Observer | Nov 15, 2009

by Tania Branigan

Barack Obama introduced himself as America’s “first Pacific president” as he launched his four-nation tour of the region, vowing to deepen ties with Asia and arguing that China’s rise should be welcomed rather than feared.

Kicking off his visit in Tokyo, he also sought to thaw the chill in relations with his hosts, America’s closest allies in the region. The new prime minister, Yukio Hatoyama, has vowed to make Japan less dependent on the US, but the two men agreed to put off the issue of resolving the future of US forces in Japan.

However, police in China are reported to have detained dozens of dissidents in a crackdown ahead of Obama’s arrival there today. Human rights campaigners said that at least 30 activists who were expected to apply for the right to hold protests directed at the Chinese government during the US president’s visit were arrested.

Reformers worry that Obama will play down China’s poor human rights record in order to maintain good relations on issues such as the economy. “We get the impression Obama doesn’t want to talk about human rights on this trip, but it is precisely because of his visit here that these people are being rounded up and detained right now,” Ai Weiwei, a Beijing-based artist and social commentator, told the Financial Times.

Speaking yesterday during the first stop on his nine-day Asian tour, Obama told an audience of 1,500 in the Japanese capital: “I want every American to know that we have a stake in the future of this region, because what happens here has a direct effect on our lives at home.”

American officials have portrayed the trip as an opportunity to develop relationships and make progress on non-proliferation, climate change and the economy, and are playing down expectations of any agreements.

As in his previous foreign affairs speeches, Obama emphasised his personal ties in the region – referring to his birth in Hawaii, time in Indonesia and boyhood travels in Asia – and the administration’s break with unilateralism.

“We welcome China’s efforts to play a greater role on the world stage – a role in which their growing economy is joined by growing responsibility,” he said. “Power does not need to be a zero-sum game and nations need not fear the success of another.”

He held out a hand to North Korea again, calling for it to denuclearise; and to Burma, if it undertakes democratic reform and frees political prisoners, including opposition leader Aung San Suu Kyi. Burma’s prime minister will be present at the president’s meeting with Association of South-east Asian Nations (Asean) leaders in Singapore.

Obama also announced that the US will sign up to a trans-Pacific free trade agreement. That may help to deflect accusations of protectionism, which are likely to be aired throughout his tour. He stressed the need for “balanced” growth and said Asian countries should not be dependent on exports to the US.

The economic crisis has underlined the interdependence of “Chimerica” in particular and the trade imbalance that has left China with vast US dollar holdings. Washington wants the Chinese currency, the yuan, to appreciate further; Beijing will repeat its concerns that US debt could endanger its dollar holdings.

But Obama’s Chinese visit is about more than money. The world’s two largest carbon emitters are meeting just weeks away from the Copenhagen climate-change conference.

China’s influence on North Korea and Iran are central to Obama’s non-proliferation agenda. Its handling of Afghanistan and Pakistan will also be high up in discussions.

Obama’s China policy is essentially his predecessor’s; the relationship is increasingly amicable. But some fear attempts to broaden it could mean less meaningful engagement.

“Bush’s approach was: you are rising in the international system and need to take on more responsibility,” said Victor Cha, director of Asian affairs in the National Security Council under George Bush and now at the Centre for Strategic and International Studies. “Obama is heaping on all these very, very high expectations – on issues like climate change and currency – and I think they are expectations that China cannot possibly meet.”

China sees itself as a vulnerable developing country as well as a rising power. And shared anxieties – such as those over proliferation – do not equal identical interests. “China’s own interests in those hot spots [North Korea, Iran, Afghanistan and Pakistan] make it deeply conflicted about playing a larger role on the world stage,” said Stephanie Kleine-Ahlbrandt of the International Crisis Group. “While the United States frames China in terms of its growing responsibilities as a major power, China continues to think primarily in terms of its own interests.”

To some observers, the administration is also too keen to please Beijing, wasting leverage rather than smoothing the path to greater gains.

Obama’s decision not to meet the Dalai Lama last month – aides say he will do so in future – “doesn’t send a signal that the US wants to work with China; it sends a signal they have basically got us,” said Cha.