Scoopit!

Diplomacy is a continuation of war by other means

Zhou Enlai :(March 5, 1898 – January 8, 1976) was the first Premier of the People's Republic of China, serving from 1949 until his death in January 1976. Zhou was instrumental in the Communist Party's rise to power, and subsequently in the construction of the Chinese economy and reformation of Chinese society.

A skilled and able diplomat, Zhou served as the Chinese foreign minister from 1949 to 1958. Advocating peaceful coexistence with the West, he participated in the 1954 Geneva Conference and helped orchestrate Richard Nixon's 1972 visit to China. Due to his expertise, Zhou was largely able to survive the purges of high-level Chinese Communist Party officials during the Cultural Revolution. His attempts at mitigating the Red Guard's damage and his efforts to protect others from their wrath made him immensely popular in the Revolution's later stages.

As Mao Zedong's health began to decline in 1971 and 1972, Zhou and the Gang of Four struggled internally over leadership of China. Zhou's health was also failing however, and he died eight months before Mao on January 8, 1976.

Wikipedia

[wp_caption id="attachment_2899" align="aligncenter" width="225" caption="Zhou Enlai"][/wp_caption]

Scoopit!

This article from the Financial Times refers.

Global inflation fears deepened as Chinese steelmakers agreed to a record increase in annual iron ore prices in a move likely to boost the cost of cars, machinery and other products.

Chinese millers agreed to pay Anglo-Australian miner Rio Tinto up to 96.5 per cent more for their ore supplies this year, the largest ever annual increase and well above the 9.5 per cent increase paid last year

Adam wonders what this will do for the Australian economy if repeated as likely in other Australian mineral contracts.

We may through this move closer to increased inflation in all economies and the spectre of global 'stagflation' draws ever closer perhaps?

Such a situation is unlikely to be positive for NZ, as imported inflation will tend to rise with negative impact on our competitiveness.

One is a leading article on what might succeed Kyoto and apart from

mentioning the fact that someone is seeking to turn Al Gore's Inconvenient Truth into an opera, which may well give a whole new meaning to the phrase 'it ain't over til the fat lady sings' outlines the shape of a deal which might benefit everyone:-

Again, the outlines of a deal are clear. The rich world should agree to increase the flow of clean investment dramatically, in exchange for a promise from fast-growing developing countries to take some steps of their own to curb emissions. That should not be such a hard sell in China and India. After all, their governments are all too aware of the devastating consequences if global warming were to cause the Himalayan glaciers to melt, or crop yields to fall . Moreover, Chinese and Indian firms, in particular, have become accustomed to the flow of funds from the CDM, and would be unhappy to see it evaporate.

Western countries would benefit too, thanks to the lower cost of cutting emissions abroad. That is why the European Union allows international offsets to be used in its “cap-and-trade” scheme. In this, governments issue a set number of permits to produce greenhouse gases, obliging firms to cut their own emissions or buy spare permits from others. The cap-and-trade scheme that America's Senate began debating this week would also allow firms to fulfil some of their obligations through green investments in other countries.

The problem as so often is the American Congress, which is likely to restrict the amount of offsets, to factories that do not compete with American ones - nonsensical to say the least- and thus panders to the anti-trade, anti-China brigade. This is made worse by the fact that the Congress is contrlled in both houses by the Democrats and even worse by the fact that Barack Obama has shown himself to be weak on trade issues.

The second article focuses on China and India and the potentially huge impact climate change could have on the Himalayan glaciers and thus on the water resources of both countries.

As the article notes:-

The vast and sparsely populated Tibetan plateau is the origin of the great river systems of China, South-East and South Asia: the Yangzi and Yellow Rivers, the Brahmaputra, the Indus, the Mekong and the Salween. The Ganges rises on the Indian side of the plateau's Himalayan rim. These rivers, fed by thousands of Himalayan glaciers, are an ecological miracle. They support some 1.3 billion people.

In the article the Economist discusses what is happening in both China and India and notes that China in fact may be responding more rapidly to the issue.

For a variety of reasons, including a desire to enhance the living standard of it's people India is seen by some as somewhat of the villain of the piece, perhaps more so than China:-

At Bali, India Supported by other developing countries, they also watered down the draft's most radical feature: a pledge by developing countries to undertake “measurable, reportable and verifiable” efforts to cut their emissions. At India's instigation, the paragraph in which this phrase appeared was reshuffled, leaving its meaning unclear.

With such tough tactics, India has acquired an ugly reputation on the global front against climate change. Among big countries, perhaps only America and Russia are considered more obdurate. Although China has shown no inclination to commit to specific emissions-cutting targets in the post-Kyoto discussions, some Chinese academics familiar with the process say that after China reaches a certain per head emissions level it might agree to cut emissions. It is anxious not to be cast as a global-warming villain, particularly given pressures mounting on it over issues ranging from trade to Tibet. China is looking to America for its cue. If America commits itself to carbon cuts, China will feel obliged to make some kind of promise too.

Many see India as unhelpful by comparison. Almost nothing could annoy India more. Partly in response, perhaps, Mr Singh has shown some flexibility.

China is seeking to curb/rein in it's emissions for a variety of reasons including security and public response to other major pollution issues.

The article concludes:-

Both countries are meanwhile trying to develop their renewables sectors. For example, India is the world's fourth-biggest producer of wind power. Its solar yield is also bigger than any country except America. Still, in the coming decades, both countries will remain heavily dependent on coal.

These developments have the potential for India and China as well to harness the intellectual capability of their people and become leaders in the area of mitigation and alternative forms of energy.

Which is why rich-world climate activists are placing their faith in two factors that appeal to India's and China's self-interest. The first is the Clean Development Mechanism (CDM), a scheme whereby companies in rich countries outsource their obligation to cut carbon emissions, by sponsoring carbon-cutting schemes in poor countries. The CDM both allows emissions to be cut efficiently, because reductions take place where they can be made most cheaply, and offers developing countries an incentive to clean up.

China, which has put a lot of government effort into it, has done far better than India out of the scheme. Last year China made more money than any other country out of rich-world polluters—$5.4 billion, or 73% of the total. India, which, along with Brazil, came second, made $445m, 6% of the total. There are, however, question marks over the future of the scheme, because some rich-world businesses and politicians are beginning to argue against handing over such large sums of money to Asia. China, meanwhile, says that it needs not just money but also clean technology, and accuses rich-countries of being tight-fisted with their intellectual property.

This may drive the development of alternative schemes to offsets such as carbon taxes.

The second factor that may encourage China and India to become greener is the growth of indigenous alternative-energy companies. There, both China and India can claim some remarkable successes.

China's Suntech, which was founded in 2001, is the third-largest manufacturer of solar cells in the world. India's Suzlon Energy is one of the world's five biggest makers of wind turbines; 15 years ago it was a modest Gujarati textiles firm. Both countries have innovative companies hungry to make money abroad and in growing local markets. As such firms grow, so will the volume of calls for more climate-friendly policies in China and India.

This is good. And yet, at a time of fast-melting glaciers and strange rains, of spreading deserts and rising seas, it is a frail and distant promise. As China and India awaken to climate change, few of their leaders and thinkers seem to expect a more solid solution: an ambitious replacement, or refreshment, of the Kyoto protocol. Such an accord would have to involve more specific commitments from China, India and other developing countries. But it would depend, first of all, upon binding action by the developed world.

Legitimately though India and China are entitled to demand that the developed world takes action also. It is not fair to penalise the developing world.

In this regard the prospect of a President McCain or Obama may well be helpful, if they can deliver and if what they deliver is not so bound up with exclusions and restrictions that it is worse than useless. Nor can the world afford the luxury of taking the sort of extended negotiation period that the Doha Round has taken.

Now all this is not to say that Adam is convinced that Climate Change as promoted by Al Gore is happening, rather he thinks that taking the steps necessary is likely to have tangible benefits in reducing overall pollution and driving the development of new technologies to deal with the potential decline in oil supplies for example.

The two articles referenced are useful contributions to understanding the issues.

Adam considers that in considering the impact upon China and India readers would do well to remember that both countries are emerging economic super powers and have a long history of rivalry.

Duanwu is often called Double Fifth, because it falls on the fifth day of the fifth lunar month of the Chinese calendar, but it's more commonly referred to as the Dragon Boat Festival, after its most famous annual event.

Almost as famous are the delicious special foods prepared for this date--the traditional dish, zongzi, is a triangular rice ball stuffed with sweet or savory fillings, and wrapped in bamboo leaves. The Duanwu beverage of choice is a special realgar yellow rice wine.

The inspiration for the holiday comes from a surprising source, the death of one of China's first great poets, Qu Yuan. Qu Yuan was a political advisor in the late forth century BC who urged his king to unite with other kingdoms against the rising state Qin. However, jealous and corrupt political opponents counseled the king against the advice of Qu Yuan, who was accused with treason and forced into exile. It was during this exile that Qu Yuan traveled the country gathering the recording local folklore and legends.  When Qin did eventually attack and capture the capital city of Ying, Qu Yuan composed one of his greatest works, "Lament for Ying". He then committed suicide by tying himself to a rock and jumping into a river.

The local fishermen tried to keep the fish from eating Qu Yuan's body by throwing food into the water. Over time this became a tradition. Later a legend gained credence that Qu Yuan was killed by a great underwater dragon.

(Qu Yuan)

The Maoist government banned celebrations of Duanwu in 1949. It wasn't until only a few years ago that the Chinese government officially reinstated three of the country's most popular holidays: Tomb Sweeping Day, Mid-Autumn Festival and Duanwu.

In 2009 Duanwu will fall on May 28.

Adam had not realised that state oil company losses will cost India US$50 billion this year.

Below is an extract from the FT editorial in question:-

But many countries, alarmed by the recent rise of oil prices to as high as $135 a barrel, are belatedly realising that the demand side of the energy equation is at least as important. Several Asian and Middle Eastern governments are reacting – sensibly, if much too slowly – by cutting the illogical subsidies for energy consumption that are playing havoc with their budgets. This applies not only to Indonesia, which remains a net energy exporter because of its sales of natural gas, but also to significant energy importers such as India.

It is interesting to note that one effect of high oil, gas and food prices has been to call into question existing protectionist measures and subsidies in some countries, but unfortunately not in all eg EU and USA

He will report on the seminar later, it is a 2 day event. His initial impression; concept - excellent, good overall, but with areas for improvement.

This post relates to the Ministerial breakfast addressed by Phil Goff, whose speech may be read here.

Present also was Pacific islands Minister Ms Winnie Laban.

Mr Goff gave an excellent speech.

Adam was impressed by his announcement of the Shanghai Concept Centre, a thoroughly good idea.

Adam echoes the Minister's comments on his sympathy and condolences for the victims of the recent earthquake in China. Adam, in common with many people, is very impressed by the comprehensive and effective response of the Chinese authorities.

Like many at the event today Adam congratulates Mr Goff and the MFAT team who achieved this major win for NZ.

Adam, who shares the views by others for example see The Hive and , sincerely wishes that the increase in MFAT spending in the budget, as previously announced by Winston Peters, will provide the funds necessary to enable NZ to fully resource the critical trade negotiations we now have in prospect.

Resting relief workers, photo from one of several slideshows at the New York Times.

Adam has linked to some comprehensive coverage for those interested in seeing what is happening.

Interactive map is here.

Comprehensive coverage can be found here

A more recent one is titled 'World Poor Pay Price as Crop Research is Cut', this article bears out the point made by Adam in other posts on the impact of reduced spend on agri-science rearch and development in recent years.

If you read the article read the charts also they help illustrate the issues.

The article begins:-

The brown plant hopper, an insect no bigger than a gnat, is multiplying by the billions and chewing through rice paddies in East Asia, threatening the diets of many poor people.

The damage to rice crops, occurring at a time of scarcity and high prices, could have been prevented. Researchers at the International Rice Research Institute here say that they know how to create rice varieties resistant to the insects but that budget cuts have prevented them from doing so.

This is a stark example of the many problems that are coming to light in the world’s agricultural system. Experts say that during the food surpluses of recent decades, governments and development agencies lost focus on the importance of helping poor countries improve their agriculture.

The budgets of institutions that delivered the world from famine in the 1970s, including the rice institute, have stagnated or fallen, even as the problems they were trying to solve became harder.

“People felt that the world food crisis was solved, that food security was no longer an issue, and it really fell off the agenda,” said Robert S. Zeigler, the director general of the rice institute.

Vital research programs have been slashed. At the rice institute, scientists have identified 14 genetic traits that could help rice plants survive the plant hopper, which sucks the juices out of young plants while infecting them with viruses. But the scientists have had no money to breed these traits into the world’s most widely used rice varieties.

The article examines the problems in funding facing the Rice Institute and similar ones elsewhere. The impact of reduced funding on staffing and programmes.

As the NYT notes:-

Similar troubles plague other centers in Asia, Africa and Latin America that work on crop productivity in poor countries. Agricultural experts have complained about the flagging efforts for years and warned of the risks.

“Nobody was listening,” said Thomas Lumpkin, director general of the International Maize and Wheat Improvement Center in Mexico.

Now, a reckoning is at hand. Growth of the global food supply has slowed even as the population has continued to increase, and as economic growth is giving millions of poor people the money to buy more food.

With demand beginning to outstrip supply, prices have soared, and food riots have erupted that have undermined the stability of foreign governments. World leaders are scrambling to respond. On May 1, President Bush asked Congress for an extra $770 million to pay for food aid and to help farmers improve their productivity.

Yet even whilst doing this, we see:-

cuts in agricultural research continue. The United States is in the midst of slashing, by as much as 75 percent, its $59.5 million annual support for a global research network that focuses on improving crops vital to agriculture in poor countries. That network includes the rice institute.

Robert Bertram, who oversees the funding for the United States Agency for International Development, said he was still trying to stop the cuts and argued that research to improve crop yields was “like putting money in the pockets of poor people, and I mean billions of poor people.”

Whilst this is happening the USA passes another farm bill providing billions in unnecessary subsidies to US agri-business and the EU maintains it's ruinously expensive Common Agriculture Policy and promotes grossly inefficient farming practices.

The NYT quotes these examples, which Adam finds truly horrifying:-

Crop by crop and country by country, agricultural research and development are lagging.

The center in Mexico has created drought-tolerant corn for Africa and higher-yielding, disease-resistant wheat for South Asia. But it does not have the money to get the varieties into the hands of poor farmers.

In Africa, where yields have remained stagnant since the 1960s, efforts to bolster them have been hampered by cuts not only in research but also in programs like fertilizer distribution.

Even in the United States, long a world leader in agricultural research, some money has been shifted away from crop-productivity work into issues like nutrition and food safety.

The biggest cutbacks have come in donations to agriculture in poor countries from the governments of wealthy countries and in loans from development institutions that the wealthy governments control, like the World Bank. Such projects include not only research on pests and crops but also programs to help farmers adopt improved methods in their fields.

But it was this next fact that really rocked him to his heels:-

Adjusting for inflation and exchange rates, the wealthy countries, as a group, cut such donations roughly in half from 1980 to 2006, to $2.8 billion a year from $6 billion. The United States cut its support for agriculture in poor countries to $624 million from $2.3 billion in that period.

That is astounding at a time of massive wealth expansion and rising living standards for so many, support to improve farming practice, crop development etc, was cut. Cut!

The article points out:-

In the 1960s, population growth was far outrunning food production, threatening famine in many poor countries. But then wealthier nations joined forces with the poor countries to improve crop yields. Countries like India and Pakistan embraced new plant varieties, irrigation projects and fertilizer programs in a vast effort that came to be known as the Green Revolution.

Yields soared, and by the 1980s, the threat of starvation had receded in most of the world. With Europe and the United States offering their farmers heavy subsidies that encouraged production, grain became abundant worldwide, and prices fell.

SO subsidies to farmers in wealthy countries directly impacted the efforts made in smaller countries to increase farming efficiency. SO the rich made the poor poorer.

The article discusses how agri-research was impacted:-

Advocates for agriculture fought a losing battle to stop the cutbacks — nowhere more than in the World Bank, the huge institution in Washington that makes low-interest loans to poor countries for development projects.

Adjusted for inflation, the World Bank cut its agricultural lending to $2 billion in 2004 from $7.7 billion in 1980.

The Green Revolution had led to creation of a global network of research centers focusing on agriculture and food production, with 14 institutes — including the International Rice Research Institute — scattered across Asia, Africa and Latin America, in addition to a research office in Washington. The centers, known collectively as the Consultative Group on International Agricultural Research, carry much of the burden of improving crop yields in developing countries.

As the world lost its focus on crops, the budgets of some of the centers were cut. At others, the budgets stayed level or even rose, but donors increasingly directed the money toward worthwhile but ancillary projects like environmental research. Spending fell on the laborious plant-breeding programs needed to improve crop productivity.

As these trends played out, the stage was being set for a food emergency.

From 1970 to 1990, the peak Green Revolution years, the food supply grew faster than the world population. But after 1990, food’s growth rate fell below population growth, according to a report by Ronald Trostle, a researcher at the Agriculture Department.

The article suggests that a focus by funders in some instances on environmental research rather than on food productivity has been somewhat less than helpful.

The NYT goes on:-

At the World Bank, agricultural financing has begun to recover. Under a new president, Robert B. Zoellick, the bank has decided to double its lending for such programs in Africa. After President Bush’s request to Congress, other wealthy countries are joining the United States in increasing their support.

But the case of the brown plant hopper shows there will be no quick fix for the years of neglect.

Around 2004, the world economy began growing more quickly, about 5 percent a year. So as the food supply was lagging, millions of people were gaining the money to improve their diets.

Yet because of past mistakes these vital research centres have been affected - to look at the Rice Institute again and the rise of the brown hopper, this pest was increasingly harmful, but in this period:-

the rice institute was being gutted.

Its money comes come from government donations, foundation grants and assistance from development institutions like the Asian Development Bank, an affiliate of the World Bank. After peaking in the early 1990s, the rice institute’s budget has been cut in half after adjusting for inflation, a reflection of the larger cutbacks in global agriculture.

Several dozen important varieties of rice have been lost from the institute’s gene bank through poor storage. Promising work on rice varieties that could withstand high temperatures and saltier water — ideal for coping with global warming and the higher sea levels that may follow — had to be abandoned.

A potential solution is at hand for the plant hopper problem. No fewer than 14 new types of genetic resistance have been discovered. But with the budget cuts, the institute has mounted no effort to breed these traits into widely used rice varieties.

Doing so now would take four to seven years, if money could be found. In the meantime, the hoppers have become a growing threat. China, the world’s biggest rice producer, announced on May 7 that it was struggling to control the rapid spread of the insects there. A plant hopper outbreak can destroy 20 percent of a harvest; China is trying to hold losses to 5 percent in affected fields.

“We must stay ahead of rapidly evolving pests — and increasingly, a changing climate — to assure global food security,” said Mr. Zeigler, the rice institute’s director. “Cutting back on agricultural research today is pure folly.”

So again we see some of the common factors that impact the issue of Food Security and Food Prices:-

• excessive and inefficient subsidies, especially in wealthy nations
• poor governance leading to lack of investment
• lack of focus on improved food productivity
• failure to invest in agri-research

Many of the disease and productivity issues could materially improve the ability of the world to feed itself and through improved productivity and new strains assist in mitigating some of the impacts of climate change.

Not to invest substantially in these areas strikes this commentator as folly.

Adam again reiterates his view that these issues offer a major opportunity to New Zealand agri-research bodies, which they should seek to grab with both hands, as the skills and expertise of NZ farmers should be highly markeatble at this time.

He laments however, what he sees as realtive under investment in research in New Zealand and thinks the government's Fast Forward fund is not the answer.

He suspects that the elimination of subsidy and protectionist tariffs would make available sufficient monies, probably more than sufficient monies to materially improve the situation, maybe even solve it and provide improved living standards for the poor and lower prices for those in more developed countries.

Overall Adam thinks it could be said that the world did not learn the real lesson of the Green Revolution, which he thinks might well be that the world can feed itself, if only it invests the skills, time and money to ensure that it does so in an efficient, practical and sustainable way - without the baggage of subsidy and protectionism which hampers us now.

Apparently, some doctors and officials were giving injections of a bogus "vaccine" to make money, and knowledge of the disease was not spread or properly handled.

I think the biggest complaint from the sars outbreak was the under-reporting/cover-up of cases, so it's encouraging that the CCP changed its guidelines for reporting cases to more accurately gauge conditions/progress of the disease.

I hope the increased transparency continues and that this isn't just a political tactic for the olympics or whatever reason.

By the way, the WHO says this will peak in June and July so hopefully with increased vigilance it won't turn out to be such a huge disaster as sars. The disease seems to target children, which I feel makes it a bigger tragedy.

After all, that's what made the pharaoh finally give in to Moses, wasn't it?

Today, included this gem:-

Energy and airports

In a burst of protective passion, the Government denied the sale of Auckland airport to a Canadian pension fund because the airport was considered to be too important for New Zealand to pass into foreign hands (albeit a minority share).

Barely a breath later, the sale of Vector Energy to a Chinese billionaire proceeds without a murmur. Is energy less important to us than air travel? It appears so.

We are staunch in our refusal to be taken over or influenced by Australia or the United States; we threw out Britain to become a dominion; we stood up to the French when they bombed the Pacific and a Greenpeace ship; we puff up against the Japanese to oppose whaling.

Yet the Government now allows our energy to be controlled by a representative of the biggest nation in the world.

I do not and never have owned shares in any company.
FLORENCE McFARLANE
Muritai

Leaving aside the somewhat dubious statements about the US and Australia having no influence, the fact that Britain granted Dominion status - NZ did not throw Britain out, we still have the Queen for example, the fact that our so-called standing up to the French did not stop them from doing anything they wanted to do and our lack of effective clout to stop the Japanese from whaling - Adam relished this sentence:-

Yet the Government now allows our energy to be controlled by a representative of the biggest nation in the world.

Cheung Kong Infrastructure is a publicly listed company incorporated in Hong Kong, with a global presence. It is not a representative of China.

It has purchased the lines network in Wellington.

Our energy is generated in the case of electricity by 4 companies, 3 of which are government owned and the 4th is controlled by Australians (who of course have no influence in NZ, despite owning most of the banks and many of the insurance companies.)

Gas is another form of energy that is not part of the deal.

Oil, another form of energy, is controlled by American and British companies

So Cheung Kung does not in anyway shape or form control our energy, it potentially owns the electricity delivery network for the Wellington region.

This network and the company owning it in New Zealand is subject to oversight by the NZ authorities. It is up to them to monitor the performance of the network owners and regulate if necessary.

Many NZ businesses are owned by American companies, does that mean using Ms McFarlane's approach:-

Yet the Government now allows our computer industry to be controlled by representatives of the sole global superpower

What piffle and tosh these people write.

It is hard to avoid the conclusion that the writer of the letter is anti Chinese, or perhaps one of those who believes that all property is theft, or both.

Alternatively, Ms McFarlane is visiting us from a parallel universe.

In the run-up to this summer’s Olympic Games, Tibetan protesters at the torch relay have denounced China’s human rights record. But does the Beijing government do any better on international legal issues at the heart of the world economy?

In theory, the Chinese government is a full member of the international legal community. On intellectual property, trade and securities regulation, it has written laws using European and US frameworks. China is part of the World Trade Organisation, has adopted international accounting standards and plans to join the network of international antitrust regulators.

In practice, things are not so clear. Chinese courts heard 668 intellectual property cases last year, up 89 per cent on 2006, and handed down a few big victories to foreigners. But counterfeiting remains rampant and drug and software patents rarely last as long as they should. China adopted international financial reporting standards in 2006 but the government tinkered with the rules. It dropped rules for disclosing related-party transactions because the state has interests in most things, and Chinese companies can book some assets at cost rather than fair value.

China’s new competition law, which comes into effect this summer, requires government clearance for some mergers and allows consumers to sue over anticompetitive behaviour. But the wording leaves open the possibility that the state may be able to protect the many companies in which it has a stake. Some overseas investors address the uncertainty head-on by writing clauses into their contracts that
hold their Chinese partners to international legal conventions and arbitration. They hope the possibility of repeat business will serve as a carrot if state enforcement fails to provide the stick.

What are the lessons here? First, businesses investing in the world’s biggest emerging economy still cannot count on legal certainty. Second, as in foreign affairs, China is keen to join the right clubs but self-confident enough to exempt itself from rules it doesn’t like.

Therefore, Adam recommends that those seeking to benefit from the NZ-China FTA should make sure that they do the following:-

1. Understand the provisions of the FTA
2. Take competent advice
3. Build long-term relationships in China
4. Seek input from those who have succeeded in China
5. Understand the issues and problems faced by those who failed in China
6. Do not expect overnight success
7. Invest in an on the ground presence
8. Seek to understand Chinese business culture and practice
9. Seek to understand the Chinese perspective on the world

As a starting point Adam suggests attending one of the presentation series being organised by MFAT on the FTA. The Wellington Regional Chamber of Commerce is involved in the Wellington one - link

At the end of the day - take care - trader beware!

Recently he came across this interactive graphic at the Financial Times. This map is regularly updated as the relay proceeds with pictures and article links.

A useful reference source and a good graphic.

This article at the Economist web-site caught Adam's eye. It discusses the competition for influence between China and India in Africa, notes India's desire for a permanent seat on the UN Security Council. Further, it suggests that some in Africa see China as having a more colonial approach than India to Africa.

The paragraph below is an extract, but the whole is worth a look:-

India nevertheless accepts that it cannot compete directly with China’s substantial financial clout, and is instead aiming for a more nuanced partnership, based on “south-south” reciprocity, as opposed to a colonial-style “north-south” relationship, which is seen as more typical of China and the West. India claims to want to help Africa add value to its products, rather than simply extract resources, but may find it difficult to develop a truly distinct approach, especially as African and Indian interests will clash in some cases. Diamonds are one example: Africa’s desire to expand domestic diamond cutting is not compatible with India’s aim to protect its dominant global position in the sector. In India’s favour, however, is a commitment to skills-building in Africa, including the use of local workers on Indian projects (in contrast to China’s pattern of using Chinese workers) and an expansion in the number of Indian higher-education places available to Africans. India’s case for partnership is also bolstered by a willingness to supply low-cost, generic drugs, and by major ongoing investment in information and communication technologies, especially in the health and education sectors.

Ukraine said it would allow exports of 1.2m tonnes in the next two months, up from a previous quota of just 200,000 tonnes.

Sorin Vaslobal, of Paris-based cereals broker Plantureux, said Kiev’s decision could trigger a domino effect. “We see Ukraine’s move as applying pressure on Russia to remove its 40 per cent export tax,” he said. Argentina and Kazakhstan have also restricted their wheat exports.

The International Monetary Fund and the World Bank have asked agriculture commodities exporters to scrap or at least ease their foreign sales restrictions.

The International Grains Council on Thursday said the global wheat crop will hit a record 645m tonnes this year, up from 603.5m tonnes in 2007, as weather improves and farmers sow more wheat at the expense of crops such as corn. Luke Chandler, a cereal analyst at Rabobank in Sydney, said: “Wheat prices are expected to ease in the second half of 2008 as a potential record-breaking world wheat crop looms.”

This is a good sign, but much remains to be done, especially in the areas of:-

• market access
• farming practice
• agriculture development
• governance
• aid

Personally, Adam is of the view that the Olympic Games should be ceased as they are too expensive, drug ridden and the subject of endless politicking.

The global trade in rice lurched to the brink of a 1970s-style “oil shock” today as prices surged 2.3 per cent to a new high and speculation mounted that Thailand, Asia’s predominant “rice superpower”, may join other regional producers in curbing exports.

The sudden spike in rice prices is a core part of a trend sweeping across the world, prompting governments to make radical changes to their calculations about how populations can be fed.

The World Food Programme said this week that the poor would be hardest hit by rampant food price inflation, and Asia in particular could soon confront the threat of “a silent famine”.

The article notes the pressures on rice producing countries. It concludes with these comments:-

Samak Sundavavej, the controversial Thai Prime Minister — himself a television chef — said yesterday that his Government would do nothing to jeopardise its reputation as “the kitchen of the world”.

But that position is under increasing strain, political analysts say, and should it falter would create the grain equivalent of the sort of oil supply crises that blighted economies in the 1970s.

James Adams, vice-president of the World Bank’s East Asia and Pacific Department, told reporters that export limits by such a key player as Thailand “would be very much like Saudi Arabia reducing oil exports”.

As further evidence of the growing unease in Thailand, an official from the country’s Agriculture Ministry said today that Thai farmers would be harvesting an extremely rare third rice crop in two months' time.

Urgent action is warranted.

Adam fears though that we will see a spiral into food protectionism and an increase in 'so called' sensitive food products.

Consequently, he has become more gloomy on the fate of the Doha Round of WTO talks.

Note these statistics from another Times article postulating major unrest in a number of Asian countries:

Feeding the world

33% Rise since January in price paid by Philippines for rice from Vietnam
3 billion People worldwide who rely on rice as a staple food
40% Rise in rice price in Thailand this year
19.2% Rise in consumer prices in Vietnam last month, against March 2007
8.4% Rise in food prices in the Philippines last month, compared with March 2007
854 million Number of people worldwide who are “food insecure”
1 billion People globally who survive on less than $1 a day, defined as “absolute poverty”

What caught my attention was this image (unfortunately, I don't know where/when it's from):

I guess you could say it's photoshopped, but I can also say pictures of violence in Chinese media are too, and we won't get anywhere on that line of argument.

Now, I don't know if it's true that these recent riots were staged, but I found another article which described the same tactic used in 1989. Here's an exerpt:

According to Mr. Chen Pokong, a Han Chinese who was a member of the student democracy movement, then a political prisoner in China, and now a respected economist and commentator living in the U.S., the riot scene this March "was quite similar to that of March, 1989. A group of young men in their twenties acted in a well organized way. They first shouted slogans, then burnt some vehicles near the Ramoche Monastery, and then broke into nearby stores and robbed them, and finally burnt many of the stores."

Or how about this even more compelling quote written by Mr. Tang Daxian:

On the dawn of March 5, the Armed Police in Tibet received the action order from the Chief Commander of Armed Police headquarter, Mr. Li Lianxiu.…The Special Squad should immediately assign 300 members to be disguised as ordinary citizens and Tibetan monks, entering the Eight-Corner Street and other riot spots in Lhasa, to support plain-clothes police to complete the task. Burn the Scripture Pagoda at the northeast of Dazhao Temple. Smash the rice store in the business district, incite citizens to rob rice and food, attack the Tibet-Gansu Trading Company. Encourage people to rob store products, but, only at the permitted locations.

Personally, I suspected that the CCP got sick of all the demonstrations and found some excuse to crack down -- but I gave them the benefit of the doubt and assumed they just got a little heavy handed and angered the monks to violence.

The picture and articles put it into a whole new light -- and unfortunately, it's not positive at all.

If anyone can debunk this or give an explanation for it (other than calling it a bunch of lies), I'd love to hear it.