British media unprofessional over Chinese Premier meets Queen Elizabeth II

Video: Li meets Queen Elizabeth II at Windsor Castle - CCTV News - CCTV.com English

Full coverage: Chinese Premier Visits Britain and Greece

UK media hype over visit unprofessional

Queen Elizabeth II met with Chinese Premier Li Keqiang and his wife in London Tuesday. However, British media had previously claimed it was the Chinese side who required a meeting with the Queen. In their reports, whether the Queen would grant an audience with Li seemed to become a bargaining chip for London. Diplomats might break out into laughter at such rhetoric. This hype only serves to reflect the narrow-mindedness of the British media and even the whole of its society. The once-powerful British Empire must now resort to such trickery to manifest its pride.

Anyone with a common sense of diplomacy understands fine-tuning of itinerary details are a necessity in high-level state visits. It is completely normal and proper for the Chinese Premier to meet with the British Queen, who should make her own contribution to the success of this diplomatic event. The British media are unprofessional by speculating over the negotiation process.

For China, Premier Li's final travel itinerary is in full conformity with the significance of his visit. Designing such an agenda was quite simple for Beijing. It is London that conceives they could utilize different options to express its opinions. However, China will pay no heed to all this.

British public opinion remains prejudiced against China and highly expects to embrace an opportunity to prove that it is superior compared with the emerging nation. Nevertheless, engaging in economic cooperation with Beijing is in its practical interests. Whenever Chinese and British leaders meet with each other, the British media habitually hypes China's human rights and calls on the British government not to sell its soul in exchange for Beijing's trade pacts.

Britain's national strength cannot be placed in the same rank as China now, a truth difficult to accept for some Britons who want to stress their nobility. If they refuse to recognize this fact and find fault with China on purpose, even at the cost of bilateral relations, they will not find any mental comfort. Chinese society is more and more relaxed in dealing with Sino-UK ties, while the British could not be pettier.

The Chinese public has a simple attitude toward the China-UK relationship in which national interests are the decisive factor. As an important European country, a positive bilateral relationship outweighs a negative one. There is no extra sentiment involved. But to us, British society attaches much more emotion when it comes to engagement with China, such as sense of pride and national dignity.

Perhaps Chinese people should forgive Britain's confusing sentiment. A rising country should understand the embarrassment of an old declining empire and at times the eccentric acts it takes to hide such embarrassment. Diplomacy has to be based on realistic recognition of the two countries' power. No matter for China or the UK, it will be tiring if they try to distort this reality.

Source:Global Times Published: 2014-6-18

China surpasses US as world's top corporate borrower; Will the IMF headquarters move to Beijing?

China surpasses US as world's top corporate borrower

Corporate debtChinese corporate borrowers owed $14.2 trillion at the end of 2013 versus $13.1 trillion owed by U.S. corporations with the switch in ranking

The Chinese mainland has surpassed the US as the world's top corporate borrower, and higher debt risk in the world's second-largest economy may mean greater risk for the world, a report said on Monday.

However, Chinese economists noted that the debt risk in China's corporate sector is still well under control.

Nonfinancial corporate debt in the Chinese market was estimated at around $14.2 trillion by the end of 2013, overtaking the $13.1 trillion debt owed by the US corporations, a progress happening sooner than expected, said a report from the Standard & Poor's Ratings Services on Monday.

The report expects that by the end of 2018 debt needs of mainland companies will reach $23.9 trillion - around one-third of the almost $60 trillion of global refinancing and new debt needs.

"It [the mainland surpassing the US as the largest corporate borrower] is not surprising at all, as the [size of] mainland non-service sector has already surpassed that of the US," Tian Yun, an economist with the China Society of Macroeconomics under the National Development and Reform Commission, told the Global Times on Monday.

Cash flow and leverage at mainland corporations has worsened after 2009, and debt risks in the property and steel sectors remain a particular concern, the report said.

Private companies are facing more challenging financing conditions - highlighted by China's first corporate bond default case of Shanghai Chaori Solar Energy Science and Technology Co in March and another case of default of leading private steel maker Shanxi Haixin Iron and Steel Group.

"The capital market has been sluggish during the past few years, leading to the fast growth in corporate debts," Xu Hongcai, director of the Department of Information under the China Center for International Economic Exchanges, told the Global Times Monday.

Experts noted that the rapid growth in debt reflected some problems of the  Chinese economy, but the size of the debt is still in a safe range and will not cause major risks as the economy remains stable.

"The problems of the Chinese economy are institutional and structural," Tian said, "By addressing these issues, debt risks can be managed."

Tian further noted that most corporate debts in China are internal debts, thus debt problems in the country will have limited impact on the rest of the world.

The report also said a possible contraction in "shadowing banking" will be detrimental to businesses as general.

But Xu noted that China's tighter supervision of the "shadow banking" sector will make it more transparent and better-regulated, which will reduce the potential risks in the sector.


Local governments face massive debt repayment pressure

China's local governments are facing huge debt repayment pressure this year with 2.4 trillion yuan ($390 billion) of debts due in 2014, China Business News reported Monday.

From 2009 to 2013, China issued 94 local government bonds raising 850 billion yuan, the report said.

With another 400 billion yuan worth of bonds to be issued this year, the total financing since 2009 will reach 1.25 trillion yuan, according to the report.

However, the total local government debt is much higher than the amount raised through the bonds, the report said, noting that major debt came from bank loans.

Although the central government has stated several times that the overall debt risk is under control, the statistics from China's National Audit Office show that some local governments have a debt-asset ratio of more that 100 percent and are facing huge repayment pressure, the report said.

Market analysts hold the view that local governments may borrow new debts to pay for the old ones.

The central government allowed local authorities to raise funds since 2009 in the wake of the global financial crisis, while the central government also issued bonds and repaid debts on behalf of the local governments, a practice criticized by some as not conforming to market economy principles.

As the bond issuing backed by the central government is limited and could not fully meet the local needs, the local governments also turned to opaque financing channels including shadow banking activities, the report said.

Despite the big debt pileup, no local government default has so far taken place.

- By Liang Fei Source:Global Times Published: 2014-6-16 23:43:09 

Will the IMF headquarters move to Beijing?

The International Monetary Fund's headquarters may one day move from Washington to Beijing, aligning with China's growing influence in the world economy, the fund's managing director Christine Lagarde said early this month.

Attaching importance to China

Christine Lagarde made the statement at the London School of Economics and Political Science (LSE), saying that the IMF rules require that the institution should be headquartered in the country that is the biggest shareholder. This has always been the U.S. since the fund was formed.

"But the way things are going, I wouldn't be surprised if one of these days, the IMF was headquartered in Beijing," she said.

Lagarde remarked that the IMF had a good relationship with China, the world's second largest economy, and she praised the Chinese government's commitment to fighting corruption.

Lagarde added that she did not think the IMF should be controlled by Europeans in its first place. Since its establishment in 1945, the IMF headquarters has been headed by Europeans and located in Washington, while the World Bank has been headed by the Americans.

Not satisfied with the U.S.

Lagarde also pointed out that the U.S. government is an "outlier" among the G20 in refusing to approve IMF reform, and the IMF was trying to give emerging economies like China and Brazil a bigger voice through reform.

According to Lagarde, on the part of countries like China, Brazil, and India, there is frustration with the lack of progress in reforming the IMF by refusing to adopt the quota reform that would give emerging economies a bigger voice, a bigger vote, and a bigger share in the institution. “I share that frustration immensely,” she said.

She also claimed that the credibility and the importance of the IMF are closely related to proper representation among the membership. "We cannot have proper representation of the membership if China has a tiny share of quota and the voice, when it has grown to where it has grown," she said.

The IMF agreed to reform its management structure in 2010 so that emerging economies could play a bigger role, and made China the third largest member. The U.S. is the only member with control weight in the voting; meaning that any major reform must be approved by the United States.

Hello headquarters

Lagarde has no specific schedule for the headquarters' shift. However, this once again reminds China that there are few international organizations headquartered in its country, which is disproportionate to China's status as the world's second largest economy.

This article is edited and translated from 《IMF总部要搬北京？》，source:Beijing Youth Daily, author: Bu Xiaoming. (People's Daily Online)

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US led to Iraq Chaos, fighting to end an unfinished war

Iraq desperate for options against ISIS

 George W. Bush's invasion of Iraq is now reaping its latest fruits, as uncontrollable violence spills over the country's borders.

JUST over a decade after George W. Bush invaded Iraq, his White House successor Barack Obama has to start clearing up the violent mess.

Today’s lethal carnage, the deadliest yet, has come courtesy of the ultra-extremist terror group Islamic State of Iraq and the Levant (ISIL). ISIL’s threat is regional, but its focus is on Iraq for now.

This image posted on a militant website June 14 appears to show militants from the al-Qaida-inspired Islamic State of Iraq and the Levant (ISIL) with captured Iraqi soldiers wearing plain clothes after taking over a base in Tikrit, Iraq. (AP)

Earlier in the week, Iraq’s second-largest city Mosul fell to the militants. ISIL took over government buildings in a brazen swoop, panicking officials and flushing out half a million people in the city who suddenly had to flee for their lives.

Then on Wednesday, ISIL militants conquered Tikrit, Saddam Hussein’s hometown. The irony and symbolism of it cannot be lost on local residents – US-style “regime change” to topple Saddam was supposed to end terrorism but has instead spread it like wildfire.

ISIL fighters had already embedded themselves in the central Iraqi city of Ramadi after taking over Fallujah near Baghdad. They have since announced a march towards the Iraqi capital.

In city after city, government troops fled after abandoning vital military assets including US-supplied heavy weaponry. ISIL militants then move in to seize the territory, buildings, military vehicles and weapons-filled arsenals, robbing banks and freeing jailed militants to grow from strength to strength.

ISIL also controls parts of Aleppo in Syria and the lucrative Conoco oil field in that country. For added funding, it operates extortion networks in Mosul.

There is no question that ISIL grows stronger as it sweeps across Iraq. Analysts say official Iraqi and US calculations have underestimated its actual strength.

However, some Iraqis may also have overestimated its strength. In one recent case, two divisions of Iraqi troops comprising 30,000 soldiers just turned and ran when faced with 800 ISIL fighters.

The result is that ISIL’s presumed strength becomes actual strength upon absorbing abandoned government assets. Never before has a government and its ally (the US) handed so many vital assets to an enemy force in so short a time.

No sooner had talk of Iraq retaining some US forces faded away inconclusively than even US diplomats suddenly felt they had to skip town, for good.

By Thursday, US diplomats were preparing plans to evacuate staff from their vast new embassy in Baghdad. Until recently the embassy stood as a proud testimony to post-Saddam Iraq, but now it may have to be handed over to a ruthless terror group.

UN staff are also preparing to evacuate. Iraq’s minorities who feel particularly vulnerable have already rushed for the borders.

Initially, ISIL was described as an al-Qaeda-inspired group. Then they were “disowned” even by al-Qaeda, after being found to be too undisciplined and too brutal for even al-Qaeda to handle.

Meanwhile ISIL has been busy with various activities, from kidnapping Turkish diplomats and targeting Christians in Mosul, to fighting Shi’ites and Kurds, to attacking Anbar University in Ramadi, briefly taking staff and students hostage.

ISIL is said to be financed generously by the same foreign backers who had sponsored Osama’s al-Qaeda. Then in Mosul it robbed a bank of nearly US$500mil (RM1.6bil) in cash, adding to its liquidity and immediate “cash flow.”

ISIL has had several name changes since its founding 10 years ago. It was led for a time by Abu Musab al-Zarkawi. Then it expanded operations to Syria in April last year when it also became known as ISIL and the Islamic State of Iraq and Syria/al-Sham (ISIS).

Under Abu Bakr al-Baghdadi’s current leadership, ISIL became the most ambitious and ruthless of the region’s militant groups. Its ultra-extremism has unnerved al-Qaeda’s Ayman al-Zawahiri, who fears Abu Bakr’s ambition to take over his group.

ISIL wants to establish an Islamist caliphate spanning several countries in the region. In the process it seeks to compel occupying US forces to withdraw, topple the Iraqi government, murder all its associates and collaborators, and empty Shi’ite-majority Iraq of Shi’ites.

Operationally, ISIL is a Sunni umbrella grouping of several hardline Islamist groups, so internal unity is crucial. Abu Bakr’s leadership is safe so long as he can maintain organisational credibility.

By early Friday, reports emerged of the Iraqi government dispatching police and army special forces to battle the militants. Given recent events, it is doubtful what good if any they can do.

In Iraqi government circles, the thought of phasing out US forces has all but disappeared. There is a new mood to welcome and even embrace what remains of the US military.

But after more than a decade, Washington has contracted war fatigue. Iraq was never Obama’s “war” anyway.

At the same time however, the US cannot be seen to be escaping through the back door, Baghdad embassy staff notwithstanding. Speaking at the White House on Thursday, Obama said he would not rule out any response needed against the militants.

On the ground in Iraq however, resistance alone is inadequate – it means ISIL can stage a return as soon as resistance fades or ends.

In 2009, Obama declared that al-Qaeda had to be “disrupted, dismantled and destroyed.” Is he now prepared to go anywhere as far against a group that is even more deadly than al-Qaeda?

As usual, John McCain has weighed in with unhelpful partisan comments. He reportedly said that Obama’s entire security team should be sacked and replaced by the Bush team.

It is highly unlikely that the Bush team will want to clean up its own mess. It is always easier to start a war than to end one satisfactorily.

That same Bush team had invaded Iraq on the false pretexts of seizing Saddam’s weapons of mass destruction (WMDs), and stopping terrorist operations. But there were no WMDs or terrorist groups; now terrorists roam and govern Iraq practically nationwide.

Saddam Hussein, for all his ruthlessness, made sure that no terrorist or militant groups could emerge. Everything changed after his fall.

There is another lesson with no shortage of eager students, however: that harshness and cruelty pay. That lesson is now being taught in Iraq, with the likes of ISIL lapping it up and preaching it.

Contributed by Bunn Nagara
Bunn Nagara is a Senior Fellow at the Institute of Strategic and International Studies (Isis) Malaysia. The views expressed are entirely the writer's own.


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