TR EMERITUS

The global economic situation appears to be no longer so dire, as with any major shock to the system, there will be profound structural changes that will shift the equilibrium towards a "new world order," a Singapore official said on Thursday. The economic situation has somewhat stabilized these two quarters, which thanks to the concerted and decisive efforts of many governments and central banks, said Lim Hwee Hua, Singapore's Minister in Prime Minister's Office, Second Minister for Finance and Transport. Speaking here at a forum dinner, She said that three trends have already begun to take shape towards a new world order, namely rebalancing of the global economy, increased domestic protectionist pressure in many countries, and "global green new deal." She said that as many economists have observed, a "delicate rebalancing act" of international trade flows would be required for a global recovery. She said that consumers in the United States and Europe are likely to save more and spend less. On the other hand, Asia, and in particular China, would have to boost domestic and intra-regional consumption so as to reduce their reliance on Western export markets. "With rising affluence and rapid urbanization, Asia will offer new opportunities for growth." She said, adding that the U.S. dominance will likely be slowly but surely balanced against new powers such as the Brazil, Russia, India and China in a multi-polar world. She also noted that there have been increasing domestic protectionist pressure faced by many governments since the downturn. She said that at the G-20 meeting last November, world leaders collectively pledged to promote global trade and to reject protectionism. While this commitment is encouraging, such consensus can in fact be quite fragile and be vulnerable to domestic pressures if the recession is prolonged. According to Lim, the third trend is the shift towards a more sustainable, low-carbon economy. China, the United States and South Korea together will be spending almost 400 billion U.S. dollars over the next five to ten years on environmental protection, energy efficiency, transport and water solutions. "Apart from contributing towards efforts at more sustainable economic progress, these massive investments will also create millions of green-collar jobs and spur business opportunities in these fields," she said. Source: Xinhua News Agency  Read More →

By Mark O'Neil from South China Morning Post For the Uygurs there are three 'butchers of Xinjiang' - the Kuomintang general who controlled it before world war two, Wang Zhen after 1949 and Wang Lequan . In the name of 'stability' they have lost the hearts of the people." So reads one of the opening chapters of the most unusual book written by a mainland Chinese about Xinjiang - Your East Turkestan, My Western Region. It has been selling like hot cakes in the Chinese world since the Urumqi riot on July 5, as people try to make sense of what happened. It is the best exposition in Chinese of the Uygur version of history. Published in Taiwan in October 2007, it is banned on the mainland. The author is an independent journalist, Wang Lixiong, who carried out research in Xinjiang over nine years. In January 1999 he was imprisoned there for 42 days for "leaking state secrets". During this time, he befriended a Uygur intellectual named Mohetaer, who became his passport to the Uygur community, providing access unavailable to most Han Chinese or foreign researchers. In his version of history Xinjiang is like Palestine, a country belonging to one people, the Uygurs, which is being colonised by another, the Han. Over the past 20 years this process has accelerated, with the arrival of more than two million Han and the marginalisation of the majority of Uygurs. "I estimate that 5-10 per cent of Uygurs want to remain in China," Mohetaer said in the book. "We want an independent state and it is a matter of time," he said. "The international environment is unfavourable to us now, but this is temporary. Our moment will come when the economic interests of China conflict with those of the US, Russia and Japan, and the central government will waver. The Western countries and Russia will use democracy as a reason to dismember China. "Once the civil war begins, 60 per cent of the Han will leave Xinjiang within the first year ... The Han have weapons and we will lose one to two million people. But we will have the support of the Islamic world and 150 million Turkish people," he said. This apocalyptic language is so different from the Chinese version of history. Ma Dazheng, director of the Xinjiang Development and Research Centre at the Chinese Academy of Social Sciences, said that since ancient times Xinjiang had been a melting pot of many races, of which the Uygur was only one. Ma said the Uygurs were content to work for a high level of autonomy within China until the second half of the 19th century when, under the influence of pan-Islamism and pan-Turkism, and the support of foreign powers, they began thinking of a separate state. "In 1933, the Republic of East Turkestan was declared in Kashgar during a time of warlord chaos and peasant rebellion. It only lasted for a few months, but the damage has been deep and long-lasting." The republic was put down by one of the three rulers regarded by many Uygurs as a "butcher" - Sheng Shicai, a Nationalist-backed warlord who ruled Xinjiang from 1933 to 1944. When he left Urumqi he took 50 trucks, many loaded with gold and silver. In 1949 he took his riches with him when he went with the Kuomintang government to Taiwan, where he died in 1970. He repressed the minorities, including Uygurs, and was infamous for his use of torture. After Sheng left the republic was declared again, in the border region of Yili , and lasted until the communist conquest in 1949, commanded by Wang Zhen. He ran the region until 1956, waging a fierce war against those fighting for independence. He established the Xinjiang Production and Construction Corps, paramilitary settlers who have become the single most important instrument of Chinese control in Xinjiang. The corps began with 175,000 soldiers and now has 2.6 million people, with a gross domestic product in excess of 65 billion yuan (HK$73.89 billion). The Han of Xinjiang regard Wang Zhen as their hero, for binding the region more closely to China. Mohetaer said Wang Zhen was responsible for the deaths of 60,000 Uygurs, including intellectuals and religious leaders, in the name of introducing socialism and "stamping out superstition". Wang Zhen's brutality was too much even for Mao Zedong , who recalled him to prevent further deterioration in relations between the different ethnic communities. Mohetaer said a brief period of liberalisation followed the end of the Cultural Revolution, when the government eased restrictions on religion. But this changed after an armed uprising by Uygurs in Baren county in April 1990, in protest against enforced abortion, which led to the killing of 100 to 200 PLA soldiers; it was put down by 60,000 soldiers using tanks and helicopters. Mohetaer said organisers of the rebellion had hoped for an uprising throughout Xinjiang, using bases in the Soviet Union. The uprising was polarising. It persuaded the government to make law and order its priority in Xinjiang, increase restrictions on Islam and encourage Han immigration to secure control of the region. On the Uygur side, a portion of the population joined radical groups that carried out bombings and assassinations, often of moderate Uygurs "collaborating" with the government. These two extremes - government hardliners and Islamist radicals - came to dominate policymaking for Xinjiang. The other pillar of government policy was economic development, to improve living standards and divert people away from extremist groups. As part of the "Go West" policy, Beijing poured investment into infrastructure, telecoms and development of oil, gas and other resources. This gave Xinjiang one of the fastest economic growth rates in China and attracted tens of thousands of Han migrants. During his first visit as president to Xinjiang last month, Hu Jintao summarised these two policies. "Xinjiang must focus on economic development, maintaining social stability, and promoting ethnic unity and common prosperity ," he said. The man implementing these policies is Wang Lequan, Communist Party chief of the region since 1994. He is by far the longest-serving provincial or regional leader on the mainland. "Wang Lequan is like Sheng Shicai and other high officials sent from China," Mohetaer said. "They are carpetbaggers who enrich themselves and their associates, give contracts to companies from the interior and retire there with their fortune." For Ma Dazheng, the fight for a separate state is like a poison. "This evil precedent [the Republic of East Turkestan] and the separatist activities have become like dirty water in the stability and development of Xinjiang," he said. "Separatist organisations have revised history to confuse their listeners and used religion to poison people's minds." Source: SCMP EDITORS' NOTE: Temasek Review is a paid subscriber of the South China Morning Post  Read More →

By Jason Dean from Wall Street Journal DALIAN, China -- Chinese Premier Wen Jiabao vowed to continue his government's aggressive stimulus efforts, saying the world's third largest economy faces persistent problems and uncertainties from the global recession despite an upturn in growth. Speaking Thursday to business leaders and others at annual World Economic Forum meeting in this northeastern Chinese port city, Mr. Wen reaffirmed the government's confidence that it can reach 8% growth in gross domestic product this year, and said Beijing's efforts to propel growth have been "timely, forceful, and effective." "But the pickup in China's economy remains unstable, unconsolidated, and imbalanced," he said. He pointed to "many uncertainties" that continue to cloud the global economic outlook, and said China's economy faces challenges ranging from persistent weakness in demand for its exports to difficulties increasing domestic consumption -- which he cited as a major government goal. "Therefore, we cannot, and will not, change policy direction under inappropriate circumstances," Mr. Wen said, adding that Beijing will "unswervingly" maintain its "active" fiscal policy and a "moderately loose" monetary policy. Mr. Wen didn't offer any fresh policy initiatives or discuss additional government outlays beyond the already announced stimulus spending. But his remarks, which follow other similar government statements, are likely to reassure Chinese stock-market investors and others who have worried that Beijing may be planning to ease off the economic gas pedal. China's economic growth accelerated in the second quarter of this year to 7.9% from a year earlier, up from 6.1% in the first quarter. There has been increasing debate recently in China and elsewhere between those who feel government assistance is still needed to shore up a wobbly recovery and those who worry that continued stimulus risks negative knock-on effects like asset bubbles and inflation. China's benchmark stock index, despite dropping sharply in August, is up more than 70% from its low last year in November. And the government on Thursday said that property prices in 70 big and mid-size cities in China rose 2% in August from a year earlier, accelerating from the 1% rise in July. Mr. Wen acknowledged potential dangers, saying the government would "be vigilant and guard against all sorts of risks including inflation." But he spent the first third of his half-hour speech emphasizing the wisdom and necessity of the Chinese government's response to the economic crisis so far, which he noted goes well beyond the well-publicized four trillion yuan, or about $585 billion, in government-led stimulus spending. The premier pointed to a basket of policies to expand domestic consumption, including greater spending on healthcare and pensions, and subsidies for the purchase of electronics and agricultural machinery by rural households. He stressed that Beijing is focused on adjusting the structure of China's economy -- not just keeping it chugging along -- so that more of it is driven by domestic demand, as opposed to exports. Unusually for a government that tends to obsess over numbers, he played down the 8% growth goal for this year -- while making clear that he thinks it will be achieved. Responding to a question about the figure, he said "actually I really don't completely focus on the GDP goal," which he said is less important than other factors such as job creation and improving energy efficiency. Mr. Wen's speech in January at the main World Economic Forum meeting in Davos, Switzerland notably put the blame for the world's economic woes on the U.S.-led western financial system. His speech Thursday largely steered clear of such recrimination, and stressed the need for cooperation on issues ranging from economic policy to avoiding protectionism. On the issue of climate change -- the subject of growing attention given the world meeting on environmental policy in Copenhagen later this year -- Mr. Wen stuck to China's position that wealthier nations need to make concessions. "Developed countries should recognize the reality of their historical responsibilities and their large per-capita emissions," he said. Source: Wall Street Journal DALIAN, China -- Chinese Premier Wen Jiabao vowed to continue his government's aggressive stimulus efforts, saying the world's third largest economy faces persistent problems and uncertainties from the global recession despite an upturn in growth. Speaking Thursday to business leaders and others at annual World Economic Forum meeting in this northeastern Chinese port city, Mr. Wen reaffirmed the government's confidence that it can reach 8% growth in gross domestic product this year, and said Beijing's efforts to propel growth have been "timely, forceful, and effective." "But the pickup in China's economy remains unstable, unconsolidated, and imbalanced," he said. He pointed to "many uncertainties" that continue to cloud the global economic outlook, and said China's economy faces challenges ranging from persistent weakness in demand for its exports to difficulties increasing domestic consumption -- which he cited as a major government goal. "Therefore, we cannot, and will not, change policy direction under inappropriate circumstances," Mr. Wen said, adding that Beijing will "unswervingly" maintain its "active" fiscal policy and a "moderately loose" monetary policy. Mr. Wen didn't offer any fresh policy initiatives or discuss additional government outlays beyond the already announced stimulus spending. But his remarks, which follow other similar government statements, are likely to reassure Chinese stock-market investors and others who have worried that Beijing may be planning to ease off the economic gas pedal. China's economic growth accelerated in the second quarter of this year to 7.9% from a year earlier, up from 6.1% in the first quarter. There has been increasing debate recently in China and elsewhere between those who feel government assistance is still needed to shore up a wobbly recovery and those who worry that continued stimulus risks negative knock-on effects like asset bubbles and inflation. China's benchmark stock index, despite dropping sharply in August, is up more than 70% from its low last year in November. And the government on Thursday said that property prices in 70 big and mid-size cities in China rose 2% in August from a year earlier, accelerating from the 1% rise in July. Mr. Wen acknowledged potential dangers, saying the government would "be vigilant and guard against all sorts of risks including inflation." But he spent the first third of his half-hour speech emphasizing the wisdom and necessity of the Chinese government's response to the economic crisis so far, which he noted goes well beyond the well-publicized four trillion yuan, or about $585 billion, in government-led stimulus spending. The premier pointed to a basket of policies to expand domestic consumption, including greater spending on healthcare and pensions, and subsidies for the purchase of electronics and agricultural machinery by rural households. He stressed that Beijing is focused on adjusting the structure of China's economy -- not just keeping it chugging along -- so that more of it is driven by domestic demand, as opposed to exports. Unusually for a government that tends to obsess over numbers, he played down the 8% growth goal for this year -- while making clear that he thinks it will be achieved. Responding to a question about the figure, he said "actually I really don't completely focus on the GDP goal," which he said is less important than other factors such as job creation and improving energy efficiency. Mr. Wen's speech in January at the main World Economic Forum meeting in Davos, Switzerland notably put the blame for the world's economic woes on the U.S.-led western financial system. His speech Thursday largely steered clear of such recrimination, and stressed the need for cooperation on issues ranging from economic policy to avoiding protectionism. On the issue of climate change -- the subject of growing attention given the world meeting on environmental policy in Copenhagen later this year -- Mr. Wen stuck to China's position that wealthier nations need to make concessions. "Developed countries should recognize the reality of their historical responsibilities and their large per-capita emissions," he said.a  Read More →