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Monday, June 13, 2016

Malaysia-China way to South China Sea disputes: a model of amicable consultations

Taking the cue from both China’s and Malaysia’s approach to South China Sea disputes.

 


Dialogue 06/05/2016 South China Sea & Sino-US ties - CCTV News - CCTV.com English


RECENTLY, the South China Sea disputes had been hyped up as a hotspot issue in regional security and discussed in almost every regional and international forum, resulting from the high-profile interference of and the manipulation by some powers outside the region.

In fact, this issue should be solved through negotiation and consultation by parties directly concerned.

Furthermore, freedom of navigation in the South China Sea, which has never been affected, has been misinterpreted by some country as “freedom exclusive to its own military vessels and planes” and flexing its muscles.

The illegal arbitration unilaterally initiated by the Philippines has been labelled as a “benchmark of law-ruling” by the West, suggesting that judicial settlement is the only way to solve disputes in the South China Sea.

Meanwhile, the approach of non-conflicting and friendly consultation has been overshadowed by the noise and chaos.

One day, a friend of mine asked me, is Malaysia a claimant in the South China Sea? If yes, why is the Malaysia-China and Philippines-China relations poles apart? This is indeed a good question.

There is no essential difference between the two pairs of ties.

As China’s close neighbours, Malaysia and the Philippines have enjoyed traditional friendship with China.

Both were the first countries to establish diplomatic relations with China among Asean states. However, while the Malaysia-China relationship is “at the best time of history” and on the path to a new era of “Diamond 40 Years”, the Philippines-China relationship is experiencing severe difficulties.

The reason behind such a striking contrast lies in the different ways the two claimants chose to deal with the disputes with China.

While Malaysia has consistently been committed to maintaining friendly relationship, properly handling disputes, strengthening cooperation and enhancing comprehensive strategic partnership with China, the Philippine president Benigno Aquino III, on the contrary, misjudged the international situation, acted as a pawn of an outsider’s geopolitical strategy, and chose to confront China.

China and Malaysia Set a Model of Amicable Consultations

China and Malaysia enjoy a time-honoured friendship. There are lots of historical records in China about the Malay peninsula since the Tang and Song Dynasties.

In the 15th century, the Ming Dynasty established close relations with the Sultanate of Malacca. Over 600 years ago, Admiral Zheng He stationed at Malacca five times during seven voyages.

He promoted friendship, developed trade and maintained justice in the area. From Admiral Zheng, people have learned the essence of Chinese culture where peace and good neighbourliness always come first.

They do believe that China has no gene of expansion, plunder or aggression. Instead, China can be a trustworthy friend and reliable partner of Malaysia.

Then Prime Minister Tun Razak first adjusted the policy on China 42 years ago with strategic insight among Asean leaders in the context of the Cold War.

He went to China for “an ice-breaking trip” and signed the Communiqué of the Establishment of Diplomatic Relations with Premier Zhou Enlai which opened a new chapter in bilateral relations. Since then, China and Malaysia have helped each other and overcome many difficulties hand in hand.

The relations between the two countries have taken a lead in China’s relations with Asean countries and set a model of friendship in the region.

After four decades, bilateral relations between China and Malaysia are full of vitality and stimulus with deeper mutual trust, frequent high-level visits, constant party-to-party and local exchanges and fruitful cooperation.

China has become Malaysia’s largest trading partner for seven years and Malaysia is China’s largest trading partner in Asean for eight years, and sixth largest in the world.

The bilateral trade volume has reached US$100bil (RM407.5bil). There are also many iconic cooperation projects.

The high-tech cooperation has reached the skies and seas. Malaysia has long been a popular destination for Chinese tourists.

Consulates-general in Kota Kinabalu and Penang and Nanning have been set up. The Malay Studies Centre was established in the Beijing Foreign Studies University and the Confucius Institutes were set up in Universiti Malaya and Segi University.

Xiamen University Malaysia Campus welcomed its first batch of students this year. Pandas Xing Xing and Liang Liang settled in Zoo Negara and gave birth to a baby panda named “Nuan Nuan”, reflecting our heartwarming bond.

Bilateral cooperation in finance, technology, defence and other fields is also striding forward. The seed sowed by the leaders has grown into a flourishing tree, blossomed and yielded fruits.

It is normal for neighbours to have differences and problems. Malaysia is one of the claimants in the South China Sea.

However, this has never hindered the development of our relations. The key is that the leaders of both countries weigh the situation in the perspective of history and experiences, recognise the trend of the world and always place cooperation and mutual development as a priority.

The leaders have frequently exchanged views on the issue of the South China Sea and reached a series of important consensus.

Both sides agree to deal with disputes through friendly consultations and dialogues, avoiding the issue of sabotaging the bilateral relations.

Furthermore, both China and Malaysia object to intervention by forces outside the region. When the Philippines was unilaterally pursuing the South China Sea arbitration case in May 2014, Prime Minister Datuk Seri Najib revisited China to celebrate the 40th anniversary of the establishment of diplomatic relations.

During the visit, the Joint Communiqué signed by the leaders reaffirmed a series of important consensus.

Both sides emphasised that “all sovereign states directly concerned shall exercise self-restraint and settle their differences by peaceful means, through friendly consultations and negotiations, and in accordance with universally recognised principles of international law, including the United Nations Convention on the Law of the Sea 1982.”

Both sides recognised that “intervention or involvement of parties not directly concerned could be counter-productive and further complicate the aforementioned differences.”

It is based on such consensus that the two sides have properly managed their differences, pushed forward their relations, benefited the two peoples and set a good example for regional countries in dealing with disputes.

Unilateral Arbitration is a Wrong Option

The Philippines’ conduct was contrary to Malaysia’s friendly and proper handling of the disputes with China.

In recent years, President Aquino abandoned the commitment of the former government, relied on a superpower to hype up the disputes in the South China Sea, and insisted on confronting China.

He became world “famous” as the arbitration case is a farce. When his term ends, apart from the severe consequences of undermining the China-Philippines traditional friendship, his political legacy will only be piles of bills from the tribunal.

China and the Philippines have a long history of friendly exchanges. The two countries established diplomatic relations in 1975, only one year after China and Malaysia.

Until 2012 when the Philippines deliberately stirred up the Huangyandao Incident and went on a path of confrontation, relations between the two countries had developed soundly and stably with fruitful cooperation in various fields which brought tangible benefits to their two peoples.

For instance, it was China and the Philippines that first launched joint maritime seismic undertaking which became a precious endeavour in the South China Sea.

The two sides launched friendly negotiations and achieved positive outcome in establishing dialogue mechanism, carrying out pragmatic cooperation and promoting joint development.

During President Arroyo’s visit to China in 2007, both sides praised the relations between two countries as a “golden era”.

It is deeply regrettable that on the occasion of the 40th anniversary of the establishment of China-Philippines relations in 2015, the bilateral ties were upset by the arbitration case, instead of entering a “diamond era” from the “golden era” as China and Malaysia has.

Compared with the breadth, depth and warmth of the friendly interaction between China and Malaysia, shouldn’t the Philippines introspect itself?

As a Chinese old saying goes, “close neighbors are more important than remote relatives.” Forces outside the region may come and go whenever they want, but China and Philippines are neighbours that cannot move away from each other.

As a country committed to regional peace and stability as well as promoting economic development, China sincerely welcomes all the regional countries to take a ride together for deeper mutual benefit and win-win cooperation.

The Philippines’ inflexibility on the arbitration case will only sacrifice its own opportunities and interest.

Amicable Consultation is the Only Way Out

People in littoral states along the South China Sea have lived for a long time in peace and harmony, ready to help each other when in need. Although in the 1960s and 1970s, some changes took place and new problems emerged, China and Asean states have consistently engaged in dialogues and communication and maintained overall peace and stability at sea without interference from powers outside the region.

The Declaration on the Conduct of Parties in the South China Sea (DOC) signed by China and Asean in 2002 has played an indispensable role.

Even if the South China Sea issue heats up, China will still stick to settling disputes through negotiation and consultation in a peaceful way. China has also proposed the “Dual Track Approach”, that is, the relevant disputes should be solved by the sovereign states directly concerned through consultation and negotiation, and that peace and stability in the South China Sea should be maintained through joint efforts of China and Asean member states.

The approach is in full accordance with international laws and practices, and has been supported by most of the Asean countries including Malaysia and Brunei which are also claimants in the South China Sea.

History will prove again that friendly consultation is the right way to settle the disputes in the South China Sea.

China is strongly opposed to the unilateral action by the Philippines and China’s position of non-acceptance and non-participation in the arbitration case will not change.

The new Philippine Government should discard illusions and return to the right track. As a matter of fact, Malaysia and Brunei have already set good examples.

Just as Chinese Foreign Minister Wang Yi stated, the arbitration case is a knot that has impeded the improvement and development of China-Philippines relations.

As to how to untie the knot, it depends on the Philippines. China wishes that the new Philippine Government will make a wise choice in consideration to improving the relations and enhancing mutually beneficial cooperation between the Philippines and China.

The Philippines should cease its arbitral proceedings, refuse to be a pawn anymore and return to bilateral negotiation with China.

China is standing ready to commit itself to full and effective implementation of the DOC and making continuous efforts with all relevant parties to maintain peace and stability in the region.

Dr. Huang Huikang

The writer is the Ambassador of the People’s Republic of China to Malaysia. The views expressed here are the writer’s own.

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Sunday, June 12, 2016

China, the shy superpower

This once sleeping dragon has taken full flight but believes in flapping its wings softly to allay fears of its real intentions. 

Vision and ambition: Xi (right) speaking with US Secretary of State John Kerry at the end of the eighth round of the US-China Strategic and Economic Dialogue at the Great Hall of the People in Beijing, China. — EPA
TWO years ago, it was predicted that China’s economy would surpass the United States as the world’s biggest. But instead of rejoicing and thumping its chest, the Chinese government strenuously sought to play it down.

This led to several articles on the Internet sporting headlines like “Why China doesn’t want to be number one”, “Why China hates being No. 1” and “China ‘fearful’ of becoming world’s number one economy”. This was in the first half of 2014.

Indeed, China was declared No. 1 by the end of that year but with the slowing down of its economy, it has slipped back to second place with the United States taking back the pole position.

Beijing must have heaved a sigh of relief but to many, China is still the power to reckon with. After all, the ambitious One Belt, One Road (Obor) Initiative launched by President Xi Jinping in 2013 remains a key strategy, through which China will become an undisputed regional and global power.

In fact, even if its economy is now second to the United States, China is widely seen as the superpower of the 21st century. But that is also a title Beijing is extremely uncomfortable with and one which Chinese leaders reject vehemently.

“China is not a superpower, we are still a developing country ... we have a long way to go to realise modernisation” was how Chinese premier Li Keqiang responded to questions from visiting editors from Asia News Network in Beijing on May 31.

Granted, China is a very big country and there are still millions among its 1.3 billion citizens who need to be lifted out of poverty. But by just about every yardstick, China measures up to superpowerhood.

By some reckoning, it achieved that status when it successfully detonated its first nuclear bomb in the late 1960s. Since then, it has built up a formidable military force with the world’s biggest standing army of 2.2 million.

Results from a survey in Australia and major Asian countries by a group of regional think tanks released last week showed that a wide majority of Australians and significant numbers of Asians already consider China more powerful than the United States.

China, once the sleeping dragon, is fully awake and airborne, creating huge turbulence and strong winds that are felt across the globe.

But no, “there are no grounds for China to become a superpower and neither does China have the intention to be one,” Li told the ANN editors.

Neither does it see itself as a Big Brother but a good friend to all, regardless of size and wealth.

The same consistent message of assurance was given by Jin Liqun, president of the Asian Infrastruc­ture Investment Bank (AIIB), when he met the editors in a separate session.

The AIIB was one of the financial institutions created to support Obor, now renamed the Belt and Road Initiative, which came about because China was dissatisfied with existing multilateral lending entities like the World Bank, the International Monetary Fund and the Asian Development Bank.

But the AIIB has also created suspicion and skepticism over China’s motives.

The eloquent Jin, who fielded a wide range of questions, kept to the script which was to give the assurance that China had no ill intentions and that the AIIB would be fully transparent in its activities and guided by three principles in choosing the projects to fund, namely that they must be financially sustainable, environmentally friendly and socially acceptable.

What’s more, he pointed out that if the AIIB is so bad, why have 57 countries become members and another 30 on the waiting list?

Why indeed. While he admitted that the AIIB had an international trust and credibility issue, he bristled when I suggested that nations signed up because they were basically hedging their bets.

After all, which country wouldn’t want the chance to get their development projects funded by a new lender in town? It is no skin off their nose.

Neither did Jin take kindly to my comment that he had painted a very rosy picture of the bank and its aims.

“I take issue with you. I never pick the rosy pictures, I always pick the realistic pictures,” he said.

Yet for all his claims of openness and transparency, no editor could pin him down on details on the type of projects that the AIIB would fund and the shortcomings of existing development banks that led to the creation of the AIIB.

Instead, Jin quoted from Jane Austen’s Mansfield Park, “Skepticism must always be forgiven, you know, because there is no hope of a cure”, substituting “selfishness” in the original text with “skepticism”.

Even though the editors met Jin and Li separately, their answers to all the questions were essentially same: China comes in peace; all it wants is cooperation and stability; it believes in prospering with its neighbours and has no desire to bully any country, no matter how small or weak; and it definitely has no wish to be a superpower.

As the Chinese say, you can talk till your saliva dries up but to no avail. China is just too massively important and influential, and it also harbours ambitions that go beyond military and economic ascendancy.

It is, as the BBC puts it, even “supersizing science” in its quest to become a global leader in science and technology. One of its most visible efforts is the building of the biggest radio telescope, the 500m Aperture Spherical Teles­cope, that when completed in September, will dwarf the current title holder, the 300m Arecibo Observatory in Puerto Rico.

It is also making huge investments in medical research and in the exploration of both inner and outer space. Its scientists have built a vessel to explore the world’s deepest oceanic trenches, all in the name of science.

But even that has reportedly spooked certain nations as they fear China will use its advanced marine technology to further its control in the territorial disputes in the South China Sea which have been dragging on for years.

The world’s “beautiful game” too has caught China’s fancy. It wants to be a football superpower by 2050 and has unveiled a blueprint on how to achieve it: build at least 20,000 football training centres and 70,000 pitches by 2020, according to the BBC.

Clearly, this is a nation with great ambitions and many achievements that it can be justifiably proud of, so why such extreme modesty and humility in dealing with the world?

Back in 2014, various experts and observers gave their take on it. The general consensus was that one of the biggest reasons was China’s fear of responsibility as in the classic line, “with great power comes great responsibility”.

Fortune.com opined that while the Chinese government would love to brag about its growing global influence, it is also pragmatic. It doesn’t want the “cumbersome international obligations” like being the world’s policeman and donor that are expected of a superpower or economic giant.

It would also seem that Chinese leaders believe taking the “softly, softly does it” line of diplomacy is most reassuring to the rest of the world and will create the least line of resistance to their overtures.

But it appears that this overly modest and diffident approach hasn’t quite worked as planned. Beijing may want to rethink its strategy because, to quote Shake­speare, it’s a case of “the lady doth protest too much, me thinks”.

By June H.L. Wong Sunday Star Focus

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Saturday, June 11, 2016

Building more homes, the only long term-way to bring house prices down

Building more homes may be one of the most practical ways to bring prices down



WHILE flipping through a business magazine, I saw an interesting chart illustrating the average household size of various countries including Malaysia.

At one glance, our number of 4.4 people per household is among the highest in the world, even in the Asia Pacific region with many developing countries.

We are far behind compared to developed nations such as United Kingdom and Australia, which have 2.3 and 2.6 people per household respectively. Our number is also higher than two nations with high population in our region, China and Indonesia, which recorded 3 and 3.9 people for their average household size respectively.

What do these numbers tell us? Other than giving us information on our demographic structure, it also offers an important insight which could address the issue of home prices in our country.

The Governor of the Bank of England (BoE) Mark Carney once said, the only long-term way to effectively bring home prices down is to build more homes. This may be one of the most practical ways for us to address the issue too.

According to National Property Information Centre(NAPIC), we had 4.9 million homes in the fourth quarter of 2015. As NAPIC does not track rural homes, we assume that only urbanites were taken into account in the survey. This accounts for about 70% of our 31 million population or 21.7 million people. Therefore, on average, there is about4.4 people per household in the urban areas of our country.

The above figure is a poorer ratio than Australia in 1927. If we are to match the same ratio as Australia today, we need 8.3 million houses instead of 4.9 million houses. It means we need additional 3.4 million houses to meet the standard in Australia.

With our current rate of housing production, which is about 70,000 new units launched a year according to NAPIC, we need 48 years to build 3.4 million homes, and it would still be a long distance for us to catch up with UK and Australia, given the rapid growth of population and urbanisation in our country.

Our Statistics Department estimates that our population will reach 38.5 million by year 2040. If we maintain the ratio of 70% urban population by then, we would need another 5.5 million houses to reach the ratio of 2.6 people per household in 2040. This literally means we need to build 230,000 houses per year for the coming 24 years!

Basic economic principle says, when demand is higher than supply, prices will go up. And when supply exceeds demand, prices will go down. Equilibrium is met when demand equals supply.

This is well reflected in the world oil market. From 2010 until early 2014, oil prices had been fairly stable at around US$110 per barrel. However, since mid-2014, prices have dropped by more than half due to a surge in production and a drop in demand in many countries.

United States production has nearly doubled over the last few years. Saudi, Nigerian and Algerian oil that once was sold in the United States have to compete for Asian markets, and the producers are forced to drop prices. Canadian and Iraqi oil production and exports are rising every year. Russians also manage to keep pumping at record levels. All these contribute to the oil prices which are hovering around $50 per barrel today.

It works the same in the real estate market. Imagine if we are having 8.3 million houses today instead of 4.9 million, our house prices would be much more affordable due to sufficient supply.

The key factor here is, we need more houses, especially affordable homes. The relevant authorities need to streamline the delivery system to encourage the number of homes built every year. Government and various local authorities should also pool resources together in filling the gap by speeding up approval process, and building more affordable homes.

Rick Jacobus, an expert in affordable homeownership in United States shares his view in his article “Why we must build?”– the answer for hot-market metro areas is simply to build. Build more. Build now. Build anywhere. Even when we build high-end housing for the rich it adds to the overall supply and pushes rents down.

I particularly like a quote in his article, “We can’t build our way out of the housing crisis but we won’t get out without building.”

It is an interesting point for us to ponder when it comes to the challenge of housing the nation in our country, especially the need for affordable homes.

 By A;an Tong

Datuk Alan Tong has over 50 years of experience in property development. He was the World President of FIABCI International for 2005/2006 and awarded the Property Man of the Year 2010 at FIABCI Malaysia Property Award. He is also the group chairman of Bukit Kiara Properties. For feedback, email feedback@fiabci-asiapacific.com.

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