TR EMERITUS

From our Correspondent In an interview with China's Xinhua news agency during a recent visit to China, Senior Minister Goh Chok Tong said the prospect for the world economy is likely to be one of slow recovery. Mr Goh said some people felt that there is still a danger of another dip. That is because the financial problems of some banks and some countries are not over yet. "So we are recovering from the stimulus package. But unlike a ball that has fallen from a height, the person does not bounce back; whereas a ball, if it drops from a very high position, is going to bounce up." he added. Despite the economic uncertainties ahead, Singapore's buoyant property market continues to boom with prices of resale HDB flats reaching a record high in June. Mr Goh also said that demand is likely to fall in U.S. as consumers begin to save more and China is in a position to make up for this shortfall. China's economic reforms of recent years has led to the emergence of a middle class in China which is concentrated mainly in the urban cities. However, China is facing problems of its own such as the widening income gap between the coastal regions and the inner provinces as well as the loss of a social safety net for millions of workers as the economy undergoes painful, but necessary structural reforms. Corruption was rampant within the ranks of the Chinese Communist Party which remains the only political party legally allowed in the country of 1.15 billion people. Official measures to stamp out graft are usually half-hearted and politically motivated. Singapore signalled its intention for closer economic ties with China when it penned a massive deal last year to co-build an eco city in the special municipal region of Tianjin, its second joint venture with China after the disastrous Suzhou Industrial Park in the 1990s. For Singapore, China represents a land of limitless potential and opportunities. It is not sure if the sentiment is mutual.  Read More →

From our Correspondent The abrupt resignation of Taiwanese Premier Liu Shao Chiuan who bore the brunt of public criticism over the government's inept handling of typhoon Morakot surprised many for its timing. Liu had earlier indicated that he would stay on for the next few weeks to oversee the relief efforts before deciding on his political future. Taiwanese Ma Ying-Jeou was also reportedly reluctant to remove Liu, a staunch ally who had proven to be able to work closely with him during his stint as mayor of Taipei. Though analysts predicted that the markets will rattled by the news, Taiwan stocks actually rose the next day after the announcement. Wu Den-yih was appointed as the new premier and Taoyuan County Magistrate Eric Chu as the new vice premier. Those two are "are far more competent," said Citigroup's Head of Taiwan Strategy Peter Kurz. "This is positive for the market...and should make for a much more effective government," said Mr. Kurz. Taiwan's headline stock index was up 1.2%. The axe was quick to fall on one of the rising political stars within the ranks of the Kuomintang (KMT). With the tide of public opinion turning against him, Ma knew he could not afford to keep Liu, which wasa becoming a liability to his administration. For all its drawbacks and flaws, the Taiwanese political system is one which guarantees a high degree of personal responsibility, accountability and transparency, the hallmarks of public governance. The Singapore government has always prided itself as a model of governance for its neighbors. There is even a graduate school - the Lee Kuan Yew School of Public Policy set up to "teach" government leaders and administrators from other countries the ethos of good public governance. While Singapore leaders may be deemed incorruptible, capable and efficient, they are subjected to less intense scrutiny than their counterparts elsewhere. There is little emphasis or attention on accountability and transparency of public officials partly because there is no opposition in Parliament to check on the ruling party. Secondly the mainstream media is completely controlled by the government which makes it easier for them to sweep mistakes, however glaring under the carpet. Most importantly, Singaporeans have become so apathetic a citizenry that they do not really care about official lapses unless they happened to be the unfortunate victim. This confluence of factors has resulted in an interesting political milieu in which government leaders can get away with literally any screw-ups without any major political repercussions. From the escape of famed terrorist Mas Selamat Kasteri, the loss of billions of reserves and Town Council sinking funds to the mass food poisoning outbreak at Geylang Serai market, no senior leader has yet to come forward to take the rap, let alone resign to atone for their mistakes. In other modern democracies like Taiwan, the media will be a watchdog to the government. In Singapore, the media has been turned into the government's own propaganda mouthpiece. No matter how capable, efficient or hardworking a leader is, nobody is indispensable in the government. Every single mistake made, big and small, must be accounted for. A self-righteous administration which regards itself as omnipotent and a media subjected to its whims and fancies is a dangerous combination in any nation. When there is no way for the public to assess the performance of their leaders accurately, fairly and objectively, it allows less capable men to hold important portfolios in the government and worst still, provides shenigans ample opportunities to manipulate public institutions to entrench themselves in power. Singapore's political system has several advantages over the Taiwanese system, but that shouldn't stop us from learning from their strong points. There is no perfect political system in the world. Each has its own set of strengths and weaknesses. We have to be acutely aware of our own shortcomings while keeping an open mind towards what others have to offer. At the present moment, the PAP government is still adamant that their one-party system is superior to all other kinds of political setup and it is the only one suitable for Singapore. This misconception, however well intended, is the biggest threat to Singapore's future. Under the PAP system, every single institution in the country from the mass media, police, academia and civil society has come under its direct or indirect influence. A corrupt leader can easily strode into office and buttress his/her position by abusing all instruments of the state to serve his own interests and there will be no free press to expose him/her. Neither will the police investigate into allegations of wrong-doings nor will he/she be prosecuted under the court of law. Only when political leaders are made to be fully accountable to the citizens will we be able to keep corrupted, incapable and inept people at bay from public office. By the time we wait till the PAP to be corrupted on its own, there will be no way for us to remove them from power legally. Even today, the PAP still consider it a political necessity to make use of GRCs to maintain control over the electoral system though they will probably win in one-to-one elections as well perhaps with the loss of a few seats. The PAP's own inner insecurities and fears may ironically play into the hands of a political schemer plotting to run the country as his/her personal fiefdom with little accountability or transparency.  Read More →

By Ian Johnson from Wall Street Journal China said Sunday it would review complaints about U.S. exporters' pricing of chicken and auto products after Washington's move to slap punitive sanctions on Chinese tire imports, raising tensions in a trade dispute ahead of two planned meetings between the countries' leaders. While some observers in China say that ties between the nations should remain unharmed, the measures add to worries about trade protectionism amid rising unemployment around the world. China said Sunday it would review complaints about U.S. exporters' pricing of chicken and auto products after Washington's move to slap punitive sanctions on Chinese tire imports, raising tensions in a trade dispute ahead of two planned meetings between the countries' leaders. While some observers in China say that ties between the nations should remain unharmed, the measures add to worries about trade protectionism amid rising unemployment around the world. Citing a jump in Chinese imports, the Obama administration said Friday it would impose stiff tariffs on Chinese-made tires for the next three years, invoking a section of trade law that China agreed to as a condition for its joining the World Trade Organization in 2001. The move essentially would cut off the source of nearly 17% of all tires sold in the U.S. last year and hit cost-conscious consumers particularly hard, as retailers will have to find alternative sources for the lower-end tires that make up much of what China sends to the U.S. Beijing responded quickly. Sunday, its Ministry of Commerce said it was starting so-called antidumping procedures against U.S. exporters into China of chicken and auto products. It said it had received complaints from local producers that the U.S. products were being dumped in China at below-market prices. The ministry denied that the move, which could lead to sanctions, was protectionist. "China has consistently opposed trade protectionism, and the country's actions since the financial crisis have reflected this stance," the ministry said on its Web site. "China is willing to continue to act in accordance with countries around the world to push forward the world's economic recovery." The announcement didn't specify the timing or the exact kinds of goods involved. An official with the U.S. Trade Representative's office Sunday defended the U.S.'s trade decision and warned that Washington would be "inquiring closely" over the next several days as to the basis for China's response. "Countries are entitled to actions that they think are fair and consistent with the WTO," the official said. "If this is retaliation, there may be a basis for the U.S. to react. We strongly prefer to continue what were very productive talks with China." Both chicken and auto products have been part of a battle between China and the U.S. in which both sides have already instituted trade-restricting measures, so the new actions may not measurably hurt exporters. China has already effectively blocked U.S. exports of poultry products in retaliation for a similar U.S. block of Chinese poultry. And earlier this year, China raised tariffs on imported auto parts. President Barack Obama's tire announcement, made late Friday, came as the administration is about to lean heavily on organized labor to support the administration's health-care-overhaul proposals. The United Steelworkers union has argued that a surge of Chinese tire imports has cost American jobs. Over the weekend, China's state-run Xinhua news agency said in a commentary that the U.S. sanctions were political pandering by a president trying to secure union votes in his health-care battle. "It is a huge regret that crucial China-U.S. trade relations are once again disrupted by [domestic] political disputes," the agency said. Mei Xinyu, a researcher at a think tank that reports to China's Ministry of Commerce, said China has historically avoided taking countermeasures in trade disputes but that it shouldn't be shy now. "China should bring into effect retaliatory measures this time, such as high punitive import tariffs on American imports," Mr. Mei said. He also said China should avoid taking the issue to the WTO because such complaints take years to resolve. "America will achieve its goals if China tries to resolve this dispute through the WTO," he said. Foreign business leaders in China said the U.S. decision almost invited Chinese retaliation. James Zimmerman, a Beijing-based American lawyer, said politics and trade can't be separated but that "overt political posturing welcomes a like response. We can expect the tit-for-tat political posturing going forward and in a way that may be damaging to U.S. commercial interests." Foreign businesses operating in China have argued, however, that China is itself engaging in protectionism. The European Union Chamber of Commerce in China recently released a catalog of business complaints chronicling a deteriorating atmosphere for foreign enterprises operating in China. The country's recent stimulus package, for example, in some cases favored domestic manufacturers, the EU Chamber said. Despite the rising tensions, some observers cautioned against blowing the dispute out of proportion. Yan Xuetong, director of Tsinghua University's Institute of International Studies, said during such a rocky economic time, trade disputes between two economic giants like China and the U.S. are almost inevitable. Chinese President Hu Jintao is set to meet Mr. Obama this month at an economic summit in Pittsburgh. Mr. Obama is to visit China in mid-November to discuss the economy as well as climate change and controlling North Korea's nuclear ambitions. Chinese officials "are definitely going to do something to express their dissatisfaction, but it won't be serious," said Yan Xuetong, director of Tsinghua University's Institute of International Studies. "The two sides need each other." Source: Wall Street Journal  Read More →